Pound Weakens As Johnson Likely To Win Tory Leadership Contest
July 22 2019 - 02:44AM
RTTF2
The pound drifted lower against its major counterparts in the
European session on Monday, as results of the Tory leadership
contest will be announced tomorrow, with Boris Johnson tipped to be
the successor to Theresa May.
As voting is set to close, Alan Duncan has resigned as a Foreign
Office minister in protest against a possible Johnson victory.
Opposition to the prospect of a no-deal Brexit under the
leadership of Johnson was the reason behind ministerial
resignation.
Chancellor Philip Hammond and Justice Secretary David Gauke are
expected to leave their post, if Boris Johnson becomes Prime
Minister.
Johnson had pledged to take the U.K. out of the European Union
by October 31 deadline when he steps into No. 10.
Survey data from IHS Markit showed that British households'
expectations towards future finances remained positive in July.
The headline household finance index rose for the second
straight month in July, to 44.3 from 43.9 in June. The score
signaled the weakest level of pessimism among households towards
their finances since January.
The currency traded mixed against its major counterparts in the
Asian session. While it rose against the euro and the yen, it was
steady against the greenback and the franc.
The pound dropped to a 4-day low of 134.41 against the yen, from
a 6-day high of 135.09 it touched at 9:30 pm ET. The pound is seen
finding support around the 131.05 region.
The pound depreciated to 4-day low of 1.2462 against the dollar
from Friday's closing value of 1.2498. The pound is likely to find
support around the 1.22 area.
The U.K. currency fell to 1.2234 against the franc, a level
unseen since August 2017. Next key support for the pound is likely
seen around the 1.21 level.
The pound touched the key 0.90 level against the euro, marking a
4-day low. This follows a weekly high of 0.8955 it set at 5:15 pm
ET. On the downside, 0.92 is possibly seen as the next support
level for the pound.
Looking ahead, Canada wholesale sales for May are due at 8:30 am
ET.
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