Tory Leadership battle heats up
The Pound has had one of its most quiet weeks of 2019 against the Euro.
Sterling appears to have been adopting a wait and see approach vs the single currency.
This weekend the Tory leadership battle will start to heat up.
Ballot papers have been issued to the 160,000 Tory members across the UK.
The vote will close on 22nd July and the new Prime Minister will be announced the following day.
The likely winner at the moment appears to be Boris Johnson. However, as we have seen in recent years polls have not been entirely accurate.
I think once we have have a new leader in place this could provide the Pound with a boost.
My reasoning is that typically when the political landscape becomes settled this often results in the currency strengthening.
However, during the next few weeks, until we get a result the Pound could struggle owing to the uncertainty.
Could the UK be facing a recession?
Meanwhile, turning the focus back to the UK economy and we have a big week ahead.
Fears are increasing that the UK may be heading towards a recession. The recent PMI data have all fallen below expectations. The manufacturing, construction and services sectors have all contracted.
Bank of England governor Mark Carney has also not helped Sterling recently.
He has suggested that the central bank will review its monetary policy next month.
While global tensions are heightened and the potential of a hard Brexit remains this means that they are likely to be abandoning any plans of raising interest rates at any time in the near future.
Therefore, I think we could see further losses for the Pound vs the Euro next week
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