GBP and the UK PM: anyone in the room?
Let’s just sort out what’s happening in the UK.
With Brexit - almost nothing. Just another week passed – the one that was supposed to be decisive. Fisheries, the level playing field, and accord enforcement – none of those key sectors of negotiation saw any progress.
With Boris Johnson – really not sure. Hopefully, he is doing fine, because in two days, two of his key allies left him: Lee Cain on Wednesday, after rejecting the position of chief of staff, and Dominic Cummings on Thursday, although he will stay in until the end of the year. Observers are trying to speculate on the reason, interconnection, and Brexit implications of those events, but one thing is for sure: it will be harder for Boris Johnson to assert his power without those people.
With the GBP – so far, it’s doing fine. Strategically, it hasn’t stepped away from strengthening against the EUR. Tactically, it lost some value, possibly on those two resignations, driving EUR/GBP up to 0.90. It’s already in a downward retrace though, so the GBP is pressing on the EUR again.
We are used to saying “the next week will be decisive” but if there is something that Brexit taught us – it’s that what was announced as deadlines initially, easily converts into just another time-checkpoint for fruitless negotiations. Watch the GBP though – it’s resilience is not limitless.
