Morning all
If you think you’re having a bad day, just remember you’re not Boris! We are going to change the format around today focusing on yesterday’s news and the impact that it has on GBP across the board.
Unless you’ve been incognito for the past 24 hours you would have heard that Bojo resigned as PM having lost not only the support of his party, but an overwhelming proportion of the nation. GBP rose by over a percent yesterday on the news that he would be stepping aside once a new Convservative Party leader has been found.
GBP Short Term
In a word, tumultuous. Whilst there is the usual media parade surrounding who may take the hot seat, we are going to see GBP continue to tread water around multi year lows. Talking of which GBPUSD is trading around 6 year lows whilst GBPEUR remains incredibly range bound at a palatable 1.16-1.19. Putting aside the Conservative party circus we cannot escape the fact that inflation is the highest it has been in over 40 years. To put this in perspective (aside from £2 a litre for Super Unleaded), 1kg of Lurpak is now £9 with Supermarkets putting security tabs on butter! Something needs to be done to address this and without a clear leader to guide the ship, we have to accept GBPUSD will remain under 1.20 for the foreseeable.
GBP Long Term
Regardless of who you’re backing in the race to become the next PM, Rishi Sunak appears to be the favourite at 13/2. But with the starting pistol to the race only just fired, it’s a rapidly changing picture. Should a ‘commercially minded’ PM take the hot seat with Tax Cuts being their opening gambit, we could see GBP sentiment increase and thus the rate.
Watch this space. As always, here to help