Pound continues losing streak as Boris Johnson plants foot inside Number 10
The pound continued to slide against the euro today, following six straight weeks of falls, as it looked increasingly likely that Brexiter Boris Johnson would become Britain’s next PM.
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Sterling had fallen 0.4 per cent against the single currency shortly after 5pm UK time to buy €1.118.
Currency traders are weighing up the growing possibility that Britain will leave the European Union without a deal on 31 October, damaging its economy.
Last night health secretary Matt Hancock, a moderate, pulled out of the leadership race and backed Johnson, who has said Britain needs to leave the EU in October with or without an agreement.
A weak day for the dollar limited the pound’s losses against the currency. It had nonetheless fallen 0.2 per cent just after 5pm to buy $1.257.
The pound first slipped below the $1.27 mark on Wednesday last week, ahead of the first round of voting among Tory MPs on who their next leader should be.
With 114, Johnson gained more votes than the next three biggest scores combined, cementing his place as the frontrunner.
Yet David Madden, market analyst at CMC Markets, said he thought sterling traders did not think Johnson is intentionally seeking a no-deal exit from the EU, meaning the pound could be lower.
“Even Boris Johnson is saying that he’s looking to ideally to get some kind of deal rather than just plow ahead and hope for a no deal Brexit,” he said.
He said the pound’s poor performance comes as “traders are to an extent looking ahead to tomorrow’s Conservative leadership live debate” on the BBC.
Read more: Businesses must ramp up no-deal Brexit plans, IoD warns
“I think basically there’s going to be little to no interest in sterling until it’s made clear who is gonna be the next Prime Minister, and whoever that is, what their position on Brexit is,” he said.