GBPUSD is now up 3 big figures since the first exit polls hit, testing 1.5550 this morning and back to unchanged for the year. While initial fears of Brexit stymied the response to the Tory victory, it appears trader are pressing for stops above 1.5550 seeing more room to run here before Brexit possibilities begin to weigh.
Cable back to unch for 2015...
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Running stops up to 1.5550...
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As Bloomberg notes,
The pound rose for a third day versus the euro after surging at the end of last week when the U.K. general election unexpectedly produced an outright majority for the Conservative Party. While the Tory victory ended investors’ concern that drawn-out talks would be needed to form a government, it signaled deeper cuts to government spending that may dim the short-term growth outlook.
Investors are awaiting the BOE’s Inflation Report on Wednesday, which will be the first comment from officials after an election-campaign purdah.
“The fear is that fiscal austerity could lead to a sustained growth underperformance which will delay and temper the extent of BOE tightening,” said Valentin Marinov, head of Group-of-10 foreign-exchange research at Credit Agricole SA’s corporate and investment-banking unit in London. “My hunch is that the BOE will maintain a fairly constructive view on the U.K.’s longer-term inflation and growth outlook. The pound could extend its gains in the wake of the Inflation Report.”
Charts: Bloomberg
