Any Brexit outcome under Boris Johnson, the favorite to succeed U.K. Prime Minister Theresa May, will only compound the recent poor run for the pound, currency analysts have projected.
Sterling's slide has been catalyzed by Johnson's emergence as the front runner for 10 Downing Street, trading at 1.2520 against the dollar on Tuesday afternoon, close to a five-and-a-half month low. It hit a six-month low of 1.1139 against the euro Tuesday, before European Central Bank President Mario Draghi's dovish speech saw the euro tumble.
"There's a fundamental contradiction in that any contender for Conservative leader that espouses a Brexit that will command the support of parliament cannot become leader," said Siddiqi. Siddiqi suggested that it would suit both the U.K. and the EU politically to allow the October 31 deadline to lapse, meaning the U.K. leaves without a deal, only then to return to the negotiating table and agree a similar deal to that presented by Theresa May, which failed to gain parliamentary support.
In turn, BMO calls a 47% chance that the U.K. does not leave on October 31, resulting in a parliamentary no-confidence vote in the government, new elections and further ruptures within the Conservative and main opposition Labour parties. Such an eventuality, Gallo suggested in a recent note, would leave GBP/USD at 1.2300 and EUR/GBP at 0.8943.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Boris Johnson might be exactly the Brexit prime minister Brussels needsThe feared chaos of a no-deal Brexit is suddenly a lot more likely. At least, that's how things seem as week one of the battle to replace Theresa May as the UK's prime minister comes to an end. But some in Brussels, the de facto capital of the European Union, are not so sure things are all that bad.
Read more »
Brexit campaigner Boris Johnson advances on Britain's top jobBrexit campaigner Boris Johnson took a step closer to becoming Britain's ne...
Read more »
Boris Johnson builds lead in race to be UK prime ministerFormer Foreign Secretary Boris Johnson increased his lead in the race to become Britain's next prime minister Tuesday in a Conservative Party vote that eliminated one of his rivals and enabled upstart candidate Rory Stewart to defy expectations by remaining in the contest. Johnson, a flamboyant
Read more »
Boris Johnson wins most second round votes on path to become UK PMBoris Johnson, the frontrunner to replace British Prime Minister Theresa May, wo...
Read more »
Boris Johnson builds lead in race to be UK prime ministerConservative Party leadership candidate Johnson, a flamboyant former foreign secretary, won 126 of the 313 votes cast by Conservative lawmakers in their second-round of balloting.
Read more »