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Pound stages the largest come back since 2008

GBPUSD News by Simon Kazinsky on 11:50 January 17, 2017 EST

After yet another dramatic plunge for the pound at the start of the week where GBPUSD gapped down by more than 200 pips at the open the British currency has made a V shape recovery against the dollar following (or coinciding) the UK's PM announcement that whatever the Brexit deal is it will have to be approved by parliament.

As it tends to happen in the normal world (that is excluding US equities and the dollar) a massive move up on the currency tends to come together with a drop on stocks. The FTSE 100 shed 1.5% on the day and trades at 7,220 before the closing bell.

Whether it is a move based on fundamentals or just a squeeze on the easiest trade for months the fact is that the spike is the largest intraday recovery in almost ten years. As a consequence, GBPUSD has completely covered the gap left on Sunday and trades close to 1.24 on Tuesday afternoon.

The pound, however, remains in bears territory and this is unlikely to be the end of it for the troubled currency.