Today was eventful politically and economically.
Boris Johnson spectacularly ruled himself out of the running to be the next Conservative leader and prime minister. In his speech, Boris declared that he felt he would be unable to provide the leadership and unity needed. This was just after Michael Gove (Justice Secretary) and one of Boris’ closest allies, surprisingly announced that he, himself, would run for leader. As a result, the Pound spiked against USD briefly. Boris was further discredited when two of his key supporters, Boles and Raab, changed allegiance to Gove. Currently, it looks like a two horse race between Gove and May with May leading a poll by 36%.
Today was rich for economic data – but it didn’t have much of an impact on the currency markets. German Retail sales beat expectations at 0.9% and their unemployment change was marginally better. The UK’s current account deficit remained close to a record high at GBP32.6bn and UK GDP came in line with expectations at 0.4%. We didn’t see any market movement on the back of this. CAD, GDP and US also both came in line with expectations with little effect.
Later, we have Mark Carney’s first speech following Brexit. He is expected to promote calmness and reiterate the need for stability in such a turbulent time.
Latest FX news by Joe De Berniere