Sterling retreated yesterday, 24 October after Boris Johnson challenged opposition leader Jeremy Corbyn to “end this nightmare” and agree to a general election on 12 December.
The prime minister said if the Labour Party supported a vote before Christmas, he would reintroduce his Brexit bill and give Parliament until 6 November to pass it. Corbyn responded on Twitter, restating he would back an election only if Johnson takes a no-deal option off the table.
Support for Sterling waned, with GBP/USD falling as low as $1.2787 in late-afternoon trading.
Meanwhile, Mario Draghi used his last European Central Bank policy meeting and press conference yesterday to warn that slowing global growth and Brexit uncertainty posed a risk to the Eurozone economy.
Draghi, who will hand over to former International Monetary Fund (IMF) Chair Christine Lagarde on 1 November, said the latest data “confirm our [governing council] assessment of a protracted weakness in the Euro area”, fuelling fears that Germany may head into recession in the final quarter of 2019 and weakening the single currency against its peers.
EU offers Boris three-month “flextension”