Pound slides as more Tory MPs resign
|The pound has gotten off on the back foot at the start of the new week with the currency sliding across the board as politics continue to weigh on sentiment. Sir Alan Duncan, the foreign office minister has stepped down and there could well be more to come as it seems opponents of Boris Johnson are quite literally resigning themselves to the fact that he is set to become the next PM.
In a strong indication of what they expect is to come, two Tory MPs have already announced they will step down if Boris Johnson wins the leadership contest with Chancellor Philip Hammond and Justice Secretary David Gauke both going public yesterday with their resignations. Boris’s intention to deliver Brexit by the 31st October deadline even if that means leaving without a deal is proving very divisive and will likely mean that he will fill the new cabinet with yes-men who are hard Brexiteers.
The deadline for voting amongst Conservative members is 5PM this afternoon with the result expected tomorrow. It would come as a huge surprise for the markets if Boris Johnson isn’t the winner of the contest and while his more hardline approach to Brexit is seen as less constructive for the pound, there’s already been quite a lot of bad news baked in.
The Pound dropped for an 11th week in a row against the Euro last time out, extending the losing streak which was already the longest on record and sentiment in sterling is getting pretty extreme on the bearish side. The downside risks for the currency are readily apparent, but there is a sense that the current view is a little overly pessimistic given that Boris is more a political opportunist than a deeply ideological supporter of Brexit and therefore could well soften his stance once he is inside number 10.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.