The Pound Sterling is trading close to a 4-month trough as investors debate the likelihood that the successor to Theresa May will result in a hard crash out of the European Union. Economists said that a no-deal Brexit would be quite damaging to the UK's economy, and that has resulted in the currency coming under heavy pressure as a high-risk asset. The Prime Minister had said last week that she would resign her post on June 7th, paving the way to a growing list of contenders for the spot, which includes Boris Johnson who is seen as the front-runner. Mr. Johnson has said that unless the EU leadership in Brussels reopened negotiations so that May's plan can be renegotiated, then he is prepared to accept the repercussions.
As reported at 11:27 am (GMT) in London, the GBP/USD was trading lower at $1.2666, down 0.0899% and closer to the lower end of the day's trading range which is set at $1.2654 at the low end to $1.2702 at the high end. The EUR/GBP was trading at 0.8831 Pence, a gain of 0.0544%; the pair has ranged from 0.88061 Pence to 0.88416 Pence in this trading day.
Pound Outlook Bleak Ahead of EU Split
British is poised to leave the EU on October 31st, and the outcome of the latest European elections suggest that UK voters are less concerned about a hard crash than most politicians. However, analysts say that it is very likely that, even if Boris Johnson should be complacent with just such an event, a no-confidence vote would be called by the Parliamentarians. Analysts who have run the numbers have said that the probability of a hard crash are still less than 20%, even with Boris Johnson at the helm.