When will the end of the decline on the pound come to an end? GBP / USD quotes lower and lower

It seemed that the worst period was a long time after the pound, and most investors after the black series were expecting the exchange rate of the British currency against the dollar. However, it did not happen. The new Prime Minister of Great Britain was an opportunity to change moods and introduce a bit of optimism. The clear appreciation of the British currency now seems unlikely, and the divided views are still more favorable to bear movements.

Almost 5% down

Since the beginning of the year we have been observing the depreciation of the pound against the dollar by less than 5% (to this day around 4,8%). This weakening has gained momentum in recent days. In the last few days GBP / USD quotes have dropped by over 2%. The rate is approaching the minima from the Brexit referendum.

Brexit conflict of interest

The attitude of the current Prime Minister of Great Britain to leaving the Union is very well known. He really takes into account the divorce from the EU without any settlement. From the recent statements of Juncker, it appears that the commission is not too willing to such a solution. He noted that the terms negotiated by his predecessor, Theresa May, were binding. Therefore, there is more and more anxiety and ambiguity around the exit, which apparently is not conducive to the pound.

Boris Johnson proposed resuming negotiations on the disputed border with Ireland. The EU has made it clear that it will not agree to concessions and talks again on this matter. In Speeches of the UK Prime Minister, comments and issues raised, analysts see an increased risk of Brexit hard. Growing tensions in the United Kingdom, combined with anxiety about the EU's exit policy, do not serve the pound. Boris Johnson is waiting for a bumpy road in the renegotiation of old decisions (if such conversations are possible at all, which is not what is expected).

A weak pound favors the zloty

The pound drops helped our currency to strengthen quite significantly against the British currency. On Tuesday it fell by around 0,4%. Good data from the Polish economy and higher inflation have been calmly picked up by the market. Strengthening the zloty could be related to the publication of macroeconomic data, although it was not significantly visible.

GBP / PLN chart, H4 interval. Source: xNUMX XTB xStation