Pound set for longest rally in two months

Tokyo - The pound headed for its longest winning streak in two months before Theresa May takes over as UK prime minister later on Wednesday, ending the political uncertainty after the country’s vote to leave the European Union prompted David Cameron to step down.

The British currency rose as much as 0.7% to $1.3338, the highest level since July 4, and was 0.5% stronger at $1.3313 as of 08:03 in London.

It climbed for a fourth day, the longest rally since May 19, rebounding from a 31-year low in the immediate aftermath of last month’s Brexit referendum. Economists expect the Bank of England to lower interest rates on Thursday, capping the pound’s advance.

May has indicated that the formation of a new Brexit department with a secretary of state at its helm will be one of her first announcements.

Finding the right person for the job is 59-year-old leader’s most important task. Fellow EU leaders have said they want talks to begin quickly, and for the UK to set out its demands. May, on the other hand, is in no hurry, and has said what she wants: market access without immigration.

“The pound is supported by views that May won’t rush to begin the process toward the exit, reducing concerns about immediate negative consequences,” said Kengo Suzuki, chief currency strategist at Mizuho Securities in Tokyo.

“The removal of political uncertainty is bringing back some sense of stability after the post-Brexit turmoil.”