GBP/USD holds steady at 1.30 but Brexit fears remain
Cable remains pegged to the 1.30 handle, despite growing uncertainty regarding the future shape of Britain’s global situation in terms of trade and even geopolitics. It appears the markets are, at least for now, reluctant to price in a less favourable outcome for the ongoing Brexit negotiations. However, as deadlines approach and tension builds up between different factions within the British camp, we could soon witness a change in the dynamic that characterised the last several weeks for sterling. The British Conservative party conference can potentially add flames to the fire; later today former British Foreign Secretary Boris Johnson, one of the main challengers to PM Theresa May’s Chequers plan, will speak. A speech awaited by many, as it can indicate the will to challenge Mrs. May’s leadership. Such a scenario could impact the pound, leading to a breakthrough the 1.30 support level.
By Ricardo Evangelista, Senior Analyst, ActivTrades
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