Since Friday the GBP/USD cross has been bouncing between $1.22 and $1.2250, giving the indication the pound has found some much needed support. However, with Brexit talk still weighing heavily on sterling we could easily see the pound edge back to the lows we have witnessed over the past few weeks.
GBP/USD graph
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We could see further evidence of this later this afternoon as markets turn their attention to Bank of England Governor Mark Carny. Mr Carney is due to appear in front of the House of Lords Economic Committee at 15:35 (GMT), to talk over the economic concerns of Britain's vote to leave the European Union.
The discussions have the ability to unsettle sterling as Mr Carney could take the opportunity to pave the way for further monetary easing. Since last week's rise to the UK's inflation figure investors have started to price out another rate cut from the Bank of England, but if Carney takes a dovish stance this afternoon we could see traders reverse those positions, which in turn could force the pound lower across the board.
If Carney hints at further stimulus or another rate cut in the near future then it is likely we will see the pound give up some of the ground it has made against dollar, and we could easily see the currency pair drop below $1.21.
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