The US dollar index held strong on Wednesday amid a mixed sentiment in the market. The 10-year Treasury yields hit a fresh 20-month low while equity markets closed in the red.
A number of narratives have kept the risk assets in check across the US, Europe, and the UK. The Bank of Canada held its monetary policy meeting yesterday and left interest rates unchanged as expected
Brexit and Leadership Crisis Hits the GBP
The British pound was down 0.21% on the day. The declines came as the leading Prime ministerial candidate, Boris Johnson, is now required to appear in court. The allegations are that Johnson lied during the run-up to the Brexit referendum, in regards to the comments he made about the UK’s payments to the EU.
GBPUSD Back Near a 4-Month Low
After failing to capitalize on the breakout above 1.2716, the GBPUSD currency pair has been gradually extending the declines. Price action briefly fell to the previous four-month low close to 1.2606. We expect a firm retest of this level. In the event of a break down below this support, the GBPUSD could extend the downside momentum further.
