Strong demand for “risky assets” will have a positive influence on the value of the British currency, inasmuch as the pound has been historically correlated with high-yield financial instruments.

When the Central Bank and the Treasury launch stimulus programs at the same time, the reflationary policy of the United States leaves investors with no choice but to buy high-yield assets, inasmuch as low interest rates on short-term US government bonds are substantially below inflation. For example, the yield on annual bonds of the US Treasury is now 0.08% with inflation of 1.4%.

Investment idea: Buy 1.3940/1.3920 and take profit 1.4010.