Pound Off High as Brexit Party Tops Early U.K. EU Vote Results
Sterling erased gains of as much as 0.3% as Nigel Farage’s new single-issue Brexit Party winning 39% of the vote in the northeast of England, the first full result. Labour took just 19% of the vote, from 36% last time. The swing may harden the stance the next Tory leader takes toward Britain’s divorce from the European Union, following Prime Minister Theresa May’s resignation Friday.
A no-deal exit would be negative for the economy, increase the chance of an interest-rate cut and weigh on sterling. “Over the coming weeks sterling could certainly be hit if the market begins to assign an even larger probability of a no-deal Brexit, and cable could go below the December lows of 1.2487,” said Jane Foley, head of currency strategy at Rabobank International in London.
According to Bloomberg News the favorite to be the next Prime Minister is Boris Johnson, known to be a hardcore Brexiteer and in line with the core of the Conservative Party in Australia. That has created the chance that he might be able to negotiate and pass a deal through
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