The Pound regained some ground today following Teresa May’s victory in the race to succeed David Cameron as the new Prime Minister of the UK. Her victory helps to ease some of the worries of investors on when will a new government take over. The pound rallied above 1.30 from below 1.2850 following the announcement.
Markets, businesses and pretty much everybody will like a small bit of certainly after a 3 week period of uncertainty following the vote to leave on the June 23rd EU referendum. Markets celebrated this certainty and the FTSE is up 1.4% today, hence the UK’s currency benefited as well.
However, traders are looking at today’s move in sterling as just a retracement and they are still expecting the currency to plunge to new lows this week amid fresh BOE easing. The Bank of England will meet Thursday and the markets are waiting to see if they will cut rates or even increase the size of the QE.