After the initial impact of the Brexit vote result, the British pound appears to be cautiously stepping away from its trough last Friday. Nonetheless, investors hesitate to call a bottom on the sterling’s 31-year low, remaining cautious of developments that lie ahead.
While the dollar fell to 99.00 yen on Friday, once Britain’s decision had become apparent, both currencies have now steadied and retain their safe haven status.
The euro gained slightly from its three-month low against the dollar, now placing it at $1.1042, within the tightest intraday range the pair have seen over the past three weeks.
The pound rose 0.5% against the dollar, recovering slowly from its plummet to $1.3122, following its peak of almost $1.5000 on Friday, pre-Brexit result.
The relative calm at present may be shaken up as new factors come into play and the UK’s relationship with the EU begins to take shape. Volatility is expected in response to the two-day EU Leaders summit and the European Central Bank President’s speech, both which will commence later on in the day.
The sterling was up 0.6% against the yen, after Friday’s low, while the euro saw a 0.6% drop against the British pound, regressing from the 2-year high of 83.79 pence which it gained overnight.
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