Boris Johnson Favorit – Pound with strange tranquility

Yesterday the Tories held a first internal vote within the party. Who is to become the new party leader and thus the new prime minister of Great Britain? The Brexit hardliner Boris Johnson achieved the best result yesterday with 114 out of 313 votes. The second-best candidate after Johnson had only 43 votes. 3 candidates were eliminated from the party selection process yesterday and 7 candidates remain.

Boris Johnson. Foto: EU2017EE Estonian Presidency – CC BY 2.0

Boris Johnson in the spotlight

So it takes a big miracle for the Tories not to make Boris Johnson their new boss. For formal reasons the trial will continue until July. By the end of July all 160,000 party members are to vote in a run-off election between the two best remaining candidates. From the point of view of the EU supporters on the island, there is only hope that all Boris Johnson’s opponents in the party will somehow gather behind a candidate who is EU-friendly.

On Wednesday we already wrote about (in our opinion) worthless statements by Boris Johnson. He tried to make it clear that he could negotiate a better outcome in Brussels than Theresa May. And that’s what he said, while Jean-Claude Juncker had just made it more than clear that the EU would not renegotiate.

British equities are currently slightly negative at -35 to 7337 points on the FTSE100. The British Pound has dropped from 1.2685 to 1.2658 against the Dollar since yesterday evening. Thus the British capital market reacts de facto not at all shocked at the fact that the Grantler and steaming chatterer Boris Johnson will accomplish very probably soon the Brexit for UK.

Where does the tranquillity come from? We don’t understand. We’ve been on this subject for months. The British are wasting more and more time. The EU has granted delays. And we can strongly assume that the current deadline of October was now really the very, very last deadline extension. But we can see that. This time the British have all the time in the world. We simply assume that there is still some downward potential in the British pound, which will only be raised when the market realises the seriousness of the situation at some point. Of course this should not be a trading recommendation!

The Pound vs USD (since September 2018) is falling in the big picture. But despite the dramatic political situation in London, the chart has been showing a sideways trend for a few days now.

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