Summary:
-
Further resignations as Boris closing in on PM
-
Voting closes this evening; announcement expected tomorrow
-
Shooting star seen on W1 for EURGBP
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.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app
The pound is sliding against all its peers so far today, with political developments at the forefront of traders’ minds. Source: xStation
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.
EURGBP is on its longest winning streak ever with 11 consecutive weekly gains. However, there has been some signs that momentum could be on the wane, with longer wicks above recent candles and the last complete one printing a shooting star. Source: xStation
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
