The British pound today see-sawed between gains and losses as investors remained cautious after Boris Johnson assumed office as the new British Prime Minister. The GBP/USD currency pair was weighed down by the cabinet reshuffle announced by the new PM with many of those appointed being hard Brexiteers, which increases the chances of a no-deal Brexit.
The GBP/USD currency pair today see-sawed between a high of 1.2518 and a low of 1.2465 but was headed much lower at the time of writing.
The currency pair headed lower in the Asian session as markets priced-in some drastic moves by the new Prime Minister. The pair faded yesterday’s rally as markets reacted to the new cabinet, which includes Sajid Javid as the chancellor of the exchequer and Dominic Raab as the new foreign secretary. The appointment of Stephen Barclay as Brexit secretary and Jacob Rees-Mogg as the leader of the House of Commons was evidence of Johnson’s desire to fulfil his Brexit promise. The appointment of Jo Johnson to the cabinet also raised concerns as he is the Prime Minister’s younger brother.
The cable attempted to rally after the release of the weak advance goods trade balance by the Census Bureau, which came in at -$74.2 billion versus the expected -$72.5 billion. The release of the upbeat US durable goods orders for June had a muted impact on the pair.
The pair’s future performance is likely to be affected by UK politics as well tomorrow’s US Q2 preliminary GDP estimate.
The GBP/USD currency pair was trading at 1.2450 as at 16:49 GMT having crashed from a high of 1.2518. The GBP/JPY currency pair was trading at 135.34 having risen from a low of 134.72.
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