GBP/USD is trading strongly bid above 1.2550 so far this Monday
GBP/USD is trading strongly bid above 1.2550 so far this Monday, looking to retest the 1.2600 level ahead of the UK’s vote of confidence in PM Boris Johnson. In doing so, cable has reversed most of Friday’s US NFP-led losses, as the US dollar retreats across the board amid the return of risk flows and holiday-thinned light trading. US Treasury yields are pausing in their rally which is helping the pullback in cable, as investors reassess the Fed tightening outlook after the payrolls came in stronger than expected at 390K in May. The main catalyst behind the pound’s advance this morning, however, is UK political headlines.
GBP bulls are cheering the news that a vote of confidence in the UK PM Boris Johnson will be held later in the day between 17:00 GMT- 19:00 GMT. The ballot will immediately be counted after the vote.
A spokesperson for Johnson's Downing Street office said, "the PM welcomes the opportunity to make his case to MPs (members of parliament) and will remind them that when they're united and focused on the issues that matter to voters there is no more-formidable political force." Markets believe that if Johnson can win the vote of confidence it will end months of speculation and allow his government to focus on other political and economic priorities. The latest political development came about after a growing number of lawmakers in the governing Conservative Party questioned the British leader's flagging authority over the "partygate" scandal. A public holiday in most of the major European economies and a data-light US calendar, meanwhile, will keep the focus on UK politics in the day ahead.
A spokesperson for Johnson's Downing Street office said, "the PM welcomes the opportunity to make his case to MPs (members of parliament) and will remind them that when they're united and focused on the issues that matter to voters there is no more-formidable political force." Markets believe that if Johnson can win the vote of confidence it will end months of speculation and allow his government to focus on other political and economic priorities. The latest political development came about after a growing number of lawmakers in the governing Conservative Party questioned the British leader's flagging authority over the "partygate" scandal. A public holiday in most of the major European economies and a data-light US calendar, meanwhile, will keep the focus on UK politics in the day ahead.