During trading in Europe, the British pound is once again the centre of attention due to increased volatility. The GBPUSD pair has fallen by 45 pips to 1.2590, hitting a new weekly low, from which it subsequently shot up by 113 pips to 1.2708. The Euro rate is being kept at 1.1147 level due to the EURGBP cross falling.
Sterling then fell on the back of the political uncertainty surrounding the Conservative Party and the DUP (Democratic Unionist Party), who are struggling to reach an agreement to form a government (according to Damien Green, Britain’s First Secretary of State). The pound then rose during the Queen’s speech and during MPC member Haldane’s. Haldane announced that the central bank could reverse its assets purchasing program in the second half of 2017 if the statistics to be released adhere to current forecasts.
Buyers thought to themselves how they could induce a bullish trend and started buying the depreciating pound, seeming to forget about the recent announcement from Mark Carney concerning a premature rate hike.
The GBPUSD pair has now reversed upwards and is heading North. The EURUSD pair is under pressure from the crosses and is currently trading below the trend line at 1.1142.
The economic calendar is rather scarce of data. The US will publish data on existing home sales, after which the Energy Department will publish oil rig count for the week. If Euro bears somehow manage to break 1.1130 level, we’ll be able to see 1.1085 on the horizon.