Probably many investors watched the quotations of the Pound yesterday with curiosity. At noon Boris Johnson’s victory in the fight for leadership of the Conservative Party in Great Britain was announced. From early morning the GBP/USD exchange rate was climbing to higher and higher levels and shortly after the announcement of the results it did not change much. It seems that at least one unreliable element in the Brexit puzzle fell off, hence the slight strengthening of the Pound.
In his first statements, the new future Prime Minister said he wanted to see the European Union left on 31 October. There is therefore no surprise in this regard. It seems that the pound may gain in the coming days due to the upcoming FED meeting, which will probably cut interest rates in the USA. This is an almost certain scenario, and now the markets are wondering how sharp the cut will be and whether it will be the last one this year. Theoretically, the Pound has a chance to make a correction until the FED makes its decision. The nearest resistance is in the region of 1.2560.
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