Trade Subdued as PM Contest Evolves

Trading in the Pound Sterling was relatively subdued with the GBP/USD and EUR/GBP pairs trading within recent ranges as FX traders watch the hotly contested challenge for the Prime Minister's seat. Analysts say that the market's trepidation is likely to continue until Theresa May's replacement has been decided. Two of the front runners for the job, Boris Johnson and Michael Gove, are on opposite sides of the Brexit position; Johnson has said he would allow Britain to crash out while Gove would rather push for another postponement until an agreement is reached.

As reported at 11:16 am (GMT) in London, the GBP/USD was trading at $1.2694, up 0.093% with the trading range today from a trough of $1.2669 to a peak of $1.2699. The EUR/GBP was higher at 0.8851 Pence, up 0.0557%, and off the session peak of 0.88660 Pence while the low was at 0.88459 Pence.

Draghi Post-Decision Speech Eyed

In the Eurozone, the European Central Bank left its benchmark lending rate at the expected 0% with the deposit rate remaining at -0.4%. Markets will focus on what Mario Draghi, the president of the ECB, will say at this press conference which will take place later today. With the major central banks recently moving toward a looser monetary policy in the face of a potential global recession, many are waiting to see if Draghi will take a similar stance. The ECB chief will leave his position in October and many analysts believe he may push for a more accommodative stance before he leaves.