The Pound Sterling was able to eke out gains against the US Dollar thanks to overall weakness in the greenback, but any gains are likely to be capped after Boris Johnson had said he would definitely pull Britain out of the EU, even without a deal in place. Economists have warned that that would very likely have major negative implications on the British economy and thus, the Pound Sterling. Markets still have not fully accepted that Johnson would follow through, but FX traders remain wary of just such an eventuality. The worries over a no-deal Brexit had been all but eliminated until recently, and Johnson’s gaining traction in the race to the Prime Minister’s seat has done little to help improve sentiment for the Pound.
As reported at 11:27 am (GMT) in London, the GBP/USD was trading higher at $1.2757, a gain of 0.1885: the pair has ranged from a trough of $1.2734 to a peak of $1.2784 in today’s session. The EUR/GBP was trading at 0.8924 Pence, down 0.2582% and off the session low of 0.89158 Pence while the peak was set at 0.89510 Pence.
Markets Eye Carney Speech Ahead
Analysts say that the Pound should have already begun to benefit from the more dovish track that the Bank of England has recently taken, but worries over the Conservative party voting have put the Pound under pressure. Tomorrow, the BoE governor, Mark Carney, will be testifying tomorrow after the May inflation report is released. There, he is expected to reiterate that the BoE is taking a cautious look at the unfolding events worldwide which could impact inflation in the UK and affect monetary policy.