Forex - Pound Little Changed Despite Fears of No-Deal Brexit

The British pound was little changed against the U.S. dollar on Tuesday in Asia even after fears of a no-deal Brexit resurfaced.

The GBP/USD pair was up 0.02% to 1.2532 by 1:18 AM ET (05:18 GMT). The pair was under pressure overnight following reports that former U.K. Foreign Minister Boris Johnson is now the front-runner to replace Prime Minister Theresa May.

Johnson has previously promised to lead the United Kingdom out of the EU “with or without a deal.”

Odds of him succeeding May increased after one of his former rivals and EU supporter Matt Hancock reportedly backed him.

The EUR/USD pair was up 0.2% to 1.1235.

The European Central Bank will meet in Portugal on Thursday. The Bank of England will also make an interest rate decision on the same day.

In Asia, the Bank of Japan is also due to meet later this week.

The US Dollar Index, measured against a basket of six currencies, dropped 0.1% to 96.965.

The dollar began falling overnight after manufacturing activity in the New York area fell to a two-and-a-half year low in June.

The U.S. Federal Reserve meeting that is set to kick off later in the day is expected to be the main focus later this week. The central bank is widely expected to hold rates unchanged this month.

The USD/CNY pair traded near flat at 6.9265. Data from the Treasury Department revealed that China’s holdings of notes, bills and bonds declined by $7.5 billion in April to $1.11 trillion after Beijing its U.S. Treasury holdings to the lowest level in two years.

The USD/JPY pair fell 0.3% to 108.28.

The AUD/USD pair gained 0.2%, while the NZD/USD pair was little changed.