GBP: Strength to be faded as we get closer to general election - ING

Sandeep Kanihama FXStreet Contributor

Petr Krpata, chief EMEA FX and IR strategist at ING, points out that in the UK, after winning the leadership battle with a comfortable margin (with around two thirds of the votes), Boris Johnson is set to appoint senior cabinet figures this evening, with more pro-Brexit candidates being appointed.

Key Quotes

“Like his predecessor, the new PM is likely to face an uphill battle given the divided parliament and no consensus on the shape of a Brexit deal among MPs. As a result, we think a general election is increasingly likely - maybe even inevitable. This suggests a softer pound (EUR/GBP closer to 0.95 and GBP/USD below 1.20 in the case of a general election) meaning that any GBP strength should be faded in our view.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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