In a significant boost for Boris Johnson ahead of the Dec. 12 election, Farage said he would not contest the Conservative party in upcoming elections.
The move sent sterling soaring by increasing the chances that Johnson will remain prime minister. Farage said he did not want anti-Brexit parties to win the election. So, he was standing down candidates in 317 of the 650 seats up for grabs.
“The Brexit Party will not contest the 317 seats the Conservatives won at the last election,” Farage said. “But we will do is concentrate our total effort into all of the seats that are held by the Labour Party, who have completely broken their manifesto in 2017.”
The Brexit Party’s threat to Johnson was one of the most unpredictable elements of the election. Farage has transformed British politics over the past decade by poaching Conservative voters to force a succession of prime ministers towards ever tougher positions on Europe.
Sterling touched a high of $1.2896 though later eased off that level to stand some 0.8% higher around $1.2884. It rose as high as 85.62 pence.
British government bond prices fell as Farage spoke and were down about 30 ticks from before the announcement.
Further, Trump’s comments dampened expectations around a U.S.-China trade deal, adding to investors’ worries. Trump said on Saturday that the United States would only make a deal if it was the “right deal” for America. He added that the talks had moved more slowly than he would have liked.
Forex – Farage comments boosts sterling
The dollar index, which tracks the currency against six major currencies was down 0.18% last at 98.176. Against the euro, the dollar was 0.14% weaker at $1.103. The U.S. dollar was broadly lower on Monday after President Donald Trump’ s comments.
The dollar was 0.27% weaker against the Japanese currency, last buying 108.98 yen, and 0.36% weaker against the franc, at 0.994 per dollar.
The euro held steady against the U.S. dollar on Monday after matching a four-week low earlier. The greenback kept its gains on optimism that the United States and China would roll back tariffs that have hurt global growth. The euro traded at $1.1026, flat but not far from the Oct. 15 low of $1.10165 it fell to on Friday.
Oil prices fell more than 1% on Monday amid concerns over the prospects of a trade deal between the United States and China. Worries about oversupply also weighed on the market. Brent crude was down 69 cents, or 1.1%, at $61.82 by 0730 GMT. The contract rose 1.3% last week. U.S. crude was 63 cents, or 1.1%, lower at $56.61 a barrel, having risen 1.9% last week.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money