GBP/USD inter-markets: ‘Brexit’ setting the tone
|The Sterling has managed to leave behind post-Brexit lows in the 1.3120 area – levels last seen over 30 years ago – and push GBP/USD to recent tops above the 1.3500 handle, albeit fading part of those gains afterwards.
Momentum around Cable remains exclusively influenced by the back-and-forth from the ‘Brexit’ aftermath and the political and economic implications for both the UK and EU that will surely arise in coming weeks. Today’s earlier decision by ‘Leave’ campaigner Boris Johnson not to run for primer minister has impacted on the risk-associated space, triggering the ongoing knee-jerk and somewhat capping GBP’s upside.
A firmer tone from UK’s money markets in the short-end of the curve is contrasting with the subdued demand for the British pound, while volatility tracked by VIX remains in minimum levels.
All in all, a pick up in the greenback – tracked by the US Dollar Index – seems to be the main reason behind today’s correction from recent highs, although caution also seems to linger ahead of the key speech by Governor M.Carney.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.