The pound has finally found some relief after a sustained bout of post Brexit selling pressure. The confirmation that Conservative MP Theresa May will replace David Cameron as Prime Minister has helped to steady the ship.

The focus is also shifting to the Bank of England (BoE) decision on Thursday with some expectation that the Bank could cut interest rates following the Brexit vote. Although a cut is a possibility, it is more likely that the Bank will hold fire to collect another month of data and also assess the inflation report in August before taking formal action.

The leaning consensus that the BoE will hold the confirmation of Theresa May as the next PM has helped the Sterling find some relief, however, it is set to be a close call. If the Bank do hold fire tomorrow, it is still anticipated that we will see rate cuts and an extension of the QE programme in the months ahead.

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Article by Phil McHugh, Trading Floor Manager
* Information courtesy of Currencies Direct
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