Pound Sterling – No Cheer for New UK PM

Two important events are taking place this week:

  • UK is due a new Prime Minister – probably Boris Johnson
  • ECB Meeting – with a potential rate trim

The latest conservative PM selection is extraordinary. Intense political fighting around Brexit has already begun even before the new PM steps into Number 10. The fact that Boris Johnson is espousing ‘No Deal’ is leading to multiple ministerial resignations – and a Parliament vote last week.

Boris Johnson’s view is also alarming traders, who fear the economic fallout from a No-Deal Brexit. Hence Pound Sterling is still pinned to the floor.

Just earlier, I wondered if Sterling may have found temporary floors at its near-term lows. Over the course of a week, some pairs did; some did not. Uncertainties are still swirling around the new PM; while UK’s macro headlines are projected to be weak. Technically many GBP rates are locked in grinding downtrends.

So unless the new PM announces policies that are ‘growth friendly’, Sterling may continue to roll in the current choppy – and negative – state for a while longer. I update some new technical support levels on selected GBP rates.

GBP Near-Term Floors (Updates)

GBPUSD – 1.240

GBPEUR – 1.110

GBPJPY – 134.0 (new)

GBPCHF – 1.220 (new)

GBPCAD – 1.620 (new)

GBPAUD – 1.776 (new)

 

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