The never-ending drop of the GBP after the Brexit

After the last week’s shocking referendum on the Brexit, which brings the UK out of the EU, the Sterling extends his drop, bringing the Cable at around 1,3400, one of the lowest level in 30 years.

All the news regarding the disastrous effects of the win of the “Leave” during all the weekend, moreover, fueled the bad market sentiment on the GBP. At the moment the investors attention is addressed at the today’s meeting between Renzi, Merkel, Hollande and Tusk, and the possibility of the UK to go to the Article 50.

brexit-1

The ECB in the meantime, after having stated that it will remain close to all the central banks and private sector, continue to closely monitor the financial markets not denying the possibility of giving additional liquidity in case it would be necessary, both in Euro and in other currencies (position also shared by the Scandinavian banks).

Governor Carney moreover added that in the coming weeks, the ECB could act in order to re-equilibrate the shocks after the referendum, however reiterate that they don’t expect an emergency cut: the monetary policy moves will remain the same with a credit easing during the 14th July meeting, followed by a rate cut in August.

GBP:USD 27giu

Looking at the Cable’s chart, it is easy to see some interesting levels: considering the actual loss of 2.06% which is bringing the cross to trade at 1,3398, a braking of the lower level touched after the referendum’s exit pools last 24 June at 1,3324, could open the street to a more important drop to 1,3000 (psychological support).

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