Pound Falls Against US Dollar on Brexit Uncertainty, Later Recovers

The British pound today fell against the US dollar driven by uncertainty regarding Theresa May‘s leadership amid rumors that she could face a leadership challenge. The GBP/USD currency pair later recovered after it emerged that the Prime Minister was safe from an internal leadership contest, which reassured investors.
The GBP/USD currency pair today fell from a session high of 1.2918 to a low of 1.2864 in the mid-London session before recouping most of its losses by the time of writing.
The currency pair opened today’s session trading sideways as investors remained undecided towards it. However, the pair plunged lower in the early London session as it remained unclear whether the Conservative Party would change its rules to allow for a second Vote of no-confidence against the Prime Minister. The release of the UK CBI trends total orders for April offered some relief for the pair before the decline resumed. The pair turned higher as it appeared that the leadership challenge against PM May was not forthcoming around the mid-London session.
The cable rallied higher after the US jobless claims data released by the Department of Labor came in higher than expected. The positive US advance durable goods orders released by the Census Bureau could not reverse the rally. The cable rallied higher after Sir Graham Brady announced that PM would not face a no confidence vote.
The pair’s future performance is likely to be influenced by Brexit headlines and tomorrow’s US GDP data.
The GBP/USD currency pair was trading at 1.2898 as at 17:07 GMT having recovered from a low of 1.2864. The GBP/JPY currency pair was trading at 143.98 having dropped from a high of 144.88.

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