Investing.com — GBP/USD inched down on Friday remaining near 31-year lows, as the Pound capped its most tumultuous week in history in the wake of the shocking decision from U.K. voters to approve a measure paving the way for a departure from the European Union.
The currency pair traded between 1.3247 and 1.3350, down 0.0082 or 0.37% on the session. After briefly moving above 1.50 against the U.S. dollar in the final hours of Brexit polling last Thursday, the Pound Sterling has tumbled approximately 10% against the greenback over the last week. In Monday’s session, the Pound plummeted to an intraday low of 1.3118 against its American counterpart, its lowest level since September, 1985.
GBP/USD likely gained support at 1.3118, the low from June 27 and was met with resistance at 1.5020, the high from June 24.
Maintaining his current hard line stance, France president Francois Hollande reiterated his position that the results of last week’s historic referendum can not be reversed. Appearing alongside David Cameron in Northern France after appearing at a ceremony to commemorate the Battle of the Somme, Hollande remained adamant that the U.K. will have to face the consequences of the unexpected decision. In addition, Hollande urged leaders that a swift resolution to the Brexit developments would help diminish the uncertainty that has gripped the euro area over the last week.
“Being in the European Union has advantages. And that’s what the British are starting to understand,” Hollande said. “Those who were tempted by the Brexit are starting to think it over…The faster it goes, the better it will be for them.”
Hollande’s comments came one day after Bank of England governor Mark Carney noted that the BOE will likely approve further easing measures at some point this summer to help safeguard the economy. Earlier this week, Cameron said he would leave the task of whether to invoke Article 50 of the Lisbon Treaty to his successor. Cameron is expected to step down by September 2.
Elsewhere, Fed governor Stanley Fischer cautioned that it could be some time before the U.S. central bank will be able to determine the long-term effects of the Brexit referendum on monetary policy. In the meantime, Fischer said he is hopeful the Fed can continue tightening at a “slow, very gradual” pace amid signals of an improved economy. The Federal Open Market Committee (FOMC) will re-assess the implications of the Brexit vote on the timing of its next rate hike when it meets again on July 26-27, he added.
“We are going to have to wait and see,” Fischer said in an interview with CNBC. “It clearly is a huge event for the U.K. and it’s an important event for Europe. Our direct trade with Britain is not going to make a huge difference to us, but it could set off — there are a lot of things that will follow from Brexit for Europe, for the United Kingdom, and those are the things we will have to be thinking about.”
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.25% to an intraday low of 95.23, before rallying slightly to 95.72 at the close of U.S. afternoon trading. The index dropped by nearly 3% over the first half.