Monday is typically a quiet day in the Forex market, especially on a Monday such as today when there are no economic data releases of high importance scheduled in the calendar.
So, it is a quiet market out there, except the British Pound which has been falling steadily ever since Europe opened for business. At the time of writing, the benchmark GBP/USD currency pair is only 30 pips above its low reached when initial results in the British General Election suggested the Labour Party might be able to form a minority government.
As the market opened in Asia, it had looked as though the Pound would stabilize after its initial post-election drop. However, there is still a lot of political noise, as it becomes apparent that a formal coalition deal between the Conservatives and the DUP is not fully assured. Despite the efforts of party bigwigs, several Conservative MPs are still speaking far more freely than a party on war footing is normally prepared to tolerate. George Osborne, the former British Finance Minister, is using his role as editor of London’s premier newspaper to stick the knife into his party’s government, avenging with total disloyalty his firing by May when she assumed power last year. Worst of all, the Government has delayed the presentation of its new legislative program, which had been scheduled for next Monday.
The Pound will be weak for a while anyway, but it certainly won’t stop falling until it becomes certain that there is a Government which can command a Parliamentary majority for an agreed-upon legislative program.