The pound began the new week quite rapidly, giving impetus to the slowly swaying financial market. The British currency's start was very productive, but experts believe that the current fuse will be short-lived.
The key growth drivers for sterling were statements by British Prime Minister Boris Johnson regarding the reduction of business taxes, as well as the high probability of the Conservative Party gaining a majority of votes in the upcoming elections. Recall that if Conservatives win, Johnson's deal, agreed with the leaders of the European Union, will receive a green light. This will be a landmark event for the entire British economy, and especially for the pound, analysts said.
The strong growth of the British currency was promoted not only by the high chances for success of the Conservatives, but also by a powerful inflow of capital into risky assets. According to experts, this has a very positive effect on the pound. Additional support for the sterling is the growth of oil quotes. According to preliminary calculations, in the near future, the price of Brent oil may reach $63.22 per barrel, and the price of the pound correlates with black gold.
Many market participants are confident that before the election in the UK, sterling will be in a narrow price range. Most market players take short positions in the pound and do not intend to change their strategy. On Monday, November 18, the British currency experienced significant volatility. The GBP/USD pair managed to rise to the levels of 1.2965-1.2966, but did not last long at this level.
At the moment, the pair fell to a critical level of 1.2950, but was able to overcome the downward trend. In the future, the GBP/USD pair straightened, experts said.
To date, the greenback and the pound have come to levels 1.2962–1.2963. Sometimes the upward movement in the GBP/USD pair is followed by a slight decline, but its range does not exceed the permissible.
The current positive background helped the pound spread its wings and encouraged the market. At the moment, the prospects for the British currency are seen by experts in a rainbow light, but experienced market players advise to keep abreast and not give in to euphoria. In the wake of optimism, the pound is striving for new horizons, in particular, for the key level of 1.1300, but now this bar is almost impossible for it, experts said.