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Forex - British pound posts slight gains in Asia as Brexit politics eyed

Published 06/27/2016, 07:33 PM
Updated 06/27/2016, 07:35 PM
© Reuters.  British pound recovers slightly in Asia

© Reuters. British pound recovers slightly in Asia

Investing.com - The pound held steady to slight gains in Asia on Tuesday as investors awaited fresh developments in the U.K. political sphere that will set the stage for the timing of an official notification to the exit the European Union in an otherwise light regional data day.

GBP/USD traded at 1.3241, up 0.11%, while EUR/USD changed hands at 1.1019, down 0.05%. USD/JPY was quoted at 101.90, down 0.10%, while AUD/USD traded at 0.7346, up 0.23%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted at 96.55.

Overnight, the dollar remained at three-month highs against the other major currencies on Monday, as the U.K. decision to leave the European Union still weighed heavily on market sentiment.

The pound had briefly steadied earlier following falls in the Asian session after U.K. Chancellor George Osborne sought to reassure markets alarmed over the consequences of Brexit.

Osborne said the vote to leave the EU was likely to lead to further volatility in financial markets but claimed that the economy is as strong as it could be to face the challenges ahead.

Sterling has tumbled amid fears that the decision could hit investment in the U.K. economy, threaten London's role as a global financial capital and trigger months of political uncertainty.

Former London mayor and leading Brexit proponent Boris Johnson is soon expected to declare that he is running to lead the Conservatives, replacing Prime Minister David Cameron who resigned on Friday.

The Brexit vote could also lead to a breakup of the U.K., with Scotland now highly likely to hold a second independence referendum.

EU Regional Policy Commissioner Corina Cretu said on Monday that Britain's exit from the European Union could result in a 15% drop in the bloc's annual budget after 2020.

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