GBP: Market Focus Already Turning To What Happens After PM May – MUFG

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The pound dropped quite a lot as a result of political turmoil and the and the specter of seeing Boris Johnson in No. 10. What’s next?

Here is their view, courtesy of eFXdata:

MUFG Research discusses GBP outlook in light of the latest Brexit developments.

“The pound continues to remain under heavy selling pressure in response to building political uncertainty in the UK. EUR/GBP is on course to extend its record run to fourteen consecutive days of gains. It is now clear that Theresa May’s time as Tory leader is up. Her last-ditch attempt to pass her Brexit deal has failed,” MUFG notes.

It is inevitable now that PM May will be replaced soon and should come as no surprise. The market’s attention is already switching to what happens after PM May is replaced as leader. Leadership candidates are already positioning themselves ahead of the contest as evident by Andrea Leadsom’s decision to resign from the cabinet yesterday. The process to elect a new Tory leader is expected to be completed in the coming months. The high likelihood of new Brexiteer PM is understandably heightening fears that it will put the UK on a more confrontational course with the EU which increases the risk of a “No Deal” Brexit at the end of October. We continue to see further downside potential for the pound even after the recent sharp selloff,” MUFG adds.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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