July 22, 2024

Boris Johnson takes office – Sterling firmed

LQDFX Forex news Blog Boris Johnson takes office – Sterling firmed

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Boris Johnson takes office as British prime minister. Traders are afraid of a greater risk of a no-deal Brexit under Britain’s new leader Boris Johnson as economic stress worsens.

Boris Johnson takes office and fe will then sweep out most of May’s cabinet. Consequently, he will replace them with the team he has tasked with delivering Brexit by the end of October, with or without a deal. The European Union congratulated Boris Johnson but warned of “challenging times ahead”. EU has ruled out heeding his election pledge to renegotiate Brexit.

Boris Johnson will officially take up the mantle of Prime Minister today in the UK. Here’s how it will go down: Theresa May will make her last appearance as PM before formally resigning in front of the Queen. Then, the Queen will ask Johnson if he is capable of forming a government. When he confirms, she will invite him to be Britain’s next leader. Americans as well as Europeans are on guard to see what the new Prime Minister will do. It’s no secret the new Conservative Party leader has drawn close comparisons with President Trump.

Investors are awaiting a speech by Johnson later in the day after his formal appointment as prime minister.

Sterling stands less than 0.5% off the 27-month low it hit recently against the dollar. By 0930 GMT it was up 0.4% at $1.2481. Against the euro, it rallied 0.4% as the single currency weakened to three-week low. Some market watchers expect sterling to fall after eurosceptic Johnson’s speech on Wednesday, when he takes over as prime minister.

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Forex – Boris Johnson takes office – Sterling firmed

Investors expect ECB to be more dovish than Fed.

The dollar firmed after Washington reached a deal on Monday to lift government borrowing limits. Analysts said could serve as a reason for the U.S. Fed not to cut interest rates aggressively and support the dollar. Its index against a basket of currencies was flat at 97.66, having edged up to a five-week high of 97.76 earlier. It followed gains of nearly 0.5% the previous day.

Expectations of lower interest rates in developed economies weighed on other currencies, such as the Australian dollar. Aussie fell 0.5% to a two-week low of $0.6973.

Markets betting on ECB easing have lifted the Swiss franc, which traded at 1.0980 francs per euro.

The euro fell to a two-month low against the dollar on Wednesday, hit by weak economic data. Speculation that the European Central Bank may start easing policy as soon as this week weighed. The common currency weakened by 0.2% to $1.1127, the lowest since May 30.

In commodities, oil prices edged higher on Wednesday, supported by a sharp fall in U.S. crude stocks and tensions over Iran. Brent crude edged higher 7 cents to $63.90 a barrel by 1226 GMT. U.S. WTI crude was up 20 cents to $56.97.

Gold prices rose on Wednesday on expectations of monetary policy easing from leading central banks to shore up the global economy. Yet, strong dollar limits bullion’s gains.

Spot gold was up 0.7% at $1,426.40 an ounce at 1138 GMT but still short of last week’s peak at $1,452.60. Silver gained 0.8% to $16.52.

PLEASE NOTE The information above is not investment advice.

Sources: Reuters, Investing, CNN money