The British currency, Pound Sterling, Tuesday was by far the best performer of the day out of the major currencies. Sterling managed to regain some of the lost value after the Brexit referendum, as it climbed to a daily high of 1.3295 against the dollar and 139.46 against the Japanese Yen, recording its biggest daily gain in almost 7 years.
The higher volatility in markets because of Brexit certainly played a big role for the large movements in the currency market today. The Pound benefited for a second day on the news that Theresa May will succeed David Cameron as the new Prime Minister of Great Britain on Wednesday, July 13th.
Theresa May is known to the public as a pro-EU politician and stocks and the pound rallied on expectations for a softer exit deal between the UK and the EU. She was backing the “remain” campaign ahead of the June 23rd referendum.
Most analysts, however, still expect further downside for sterling and the 1.25 forecast against the dollar remains largely intact.