On Monday (Oct 24), the sub-session, / US fell sharply, temporarily traded at 1.1323, up 0.09%.
Markets showed little reaction to the resignation of British Prime Minister Theresa Truss.
Anz economists expect the pound to hold steady until a new prime minister is announced.
After that the focus will be on the publication of the medium-term fiscal plan and the UK decision on November 3rd;
After disappointing markets in previous months, the Bank of England is expected to have to raise rates by at least 75 basis points, and possibly 100 basis points;
The Bank of England is also justified in raising rates by 75 basis points in December;
If the Bank fails to deliver a full and credible rate rise, supported by hawkish forward guidance, sterling could again come under selling pressure.
As such, further downside is highly likely around the next relevant support at 1.1100.
The downside trajectory is likely to extend further and drag GBP/towards intermediate support at 1.1055/1.1050 and towards the psychological 1.1000 level.
