Boris Johnson wins contest: How have the GBP/USD currency markets reacted?
Yesterday at around lunchtime it was announced, as expected, that Boris Johnson would become the new leader of the Tory Party and therefore, the new Prime Minister of the UK. Although this was expected, and more or less priced into the market we did see a boost to the pounds value across the board of major currency pairs. This morning the pound to US dollar exchange rate is also trending upwards ever so slightly so there has been some positive sentiment surrounding the appointment of Boris Johnson as PM within the financial markets.
There are no economic data releases out of the UK today that could impact the value of sterling, so all eyes will be on the new PM and his choice of cabinet members which is expected to be the most diverse of any PM so far.
No interest rate rises from the Bank of England expected
For those of our readers following the pound to US dollar exchange rate, it’s worth noting that yesterday two members of the Bank of England hinted that they are unlikely to vote for an interest rate rise in the near term future.
US China trade negotiations going well
With regards to the US, the US dollar remains strong and it could see further gains in the near term future as yesterday it was announced that recent talks between the US-China trade negotiators have gone well, and there will be a meeting between the two world powers next week. This will be the first meeting since May and could also have a positive effect on the global economy if talks go well.
Perhaps the key release of the week will be the first estimate of 2nd quarter GDP for the US, which will measure economic output Stateside during that time. This data release will tie into next weeks Fed Policy Decision where a rate cut is expected by some analysts, so it’s also worth keeping an eye on.
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