By Yasin Ebrahim

Investing.com — Tuesday’s jump in sterling was a result of overcoming the early-day blues, but it is clear that political noise which has overtaken currency direction is not necessary. Risks to the pound are still to be seen as attention shifts to the Bank of England (the economy) and to the Bank of England.

The price of gold rose to $1.259 after dropping to a session low at $1.243.

Johnson survived Monday’s vote of confidence for his leadership of Conservative Party, by 211 votes to 148.

While the dark clouds of uncertainty hanging over Johnson’s future as prime minister are “unlikely to fade…markets are overpricing the impact of recent political noise on the UK economy,” ING said in a note.

Johnson’s narrow victory doesn’t provide “any clear implication for economic policy and – by extension – for the pound’s fundamentals,” ING added.

As the noise from Westminster takes a backseat, the pound will return to its prior diet, which included a heavy helping of Bank of England policy expectations and the U.K.’s economic outlook.

However, neither of these things have been easy to digest for the pound as the currency has fallen by about 11% against USD after a expected fall in the economy over the last month that fuelled recession fears.

The focus will potentially shift “back to other drivers such as the Bank of England’s policy or a slowing economic outlook,” ING added. “In our view, downside risks to the pound persist, but they are not strictly linked to the recent political developments.”