Sterling (GBP) Talking Points
- Sterling neutral against most other G7 currencies.
- GBPUSD pops higher as US dollar weakens further.
Fundamental Forecast for the British Pound: Neutral
The outlook for Sterling remains neutral, and from a fundamental perspective is likely to stay that way, with Brexit negotiations currently on the back-burner as UK domestic politics take over. UK PM Theresa May stood down today but remains temporary PM until a new Conservative leader is chosen, with Brexiteer Boris Johnson still the firm favorite for the role he has coveted for so long.
Candidates for the leadership position will enter the fray on Monday (June 10) and the process of whittling down the list will continue until June 22 when just two candidates are left. Conservative party members are then expected to have one month (July 22) to decide on their preferred candidate with the new leader likely to be announced on July 23. The UK is currently scheduled to leave the EU on October 31.
Sterling is likely to remain rangebound during this process although pockets of volatility will occur as MPs decide who to back. The Pound will be susceptible to data releases on Monday and Tuesday next week, including the latest monthly growth projections, industrial and manufacturing data and the latest look at the jobs and wages figures on Tuesday.
The Sterling basket continues it recent drift lower,