Chronicle Editor
The pound may slide to a two-year low if a hardline eurosceptic takes over as the UK Prime Minister, according to a Bloomberg survey of analysts.
Sterling could drop more than 2 percent to $1.24 in the event a Brexiteer such as front-runner Boris Johnson replaces Theresa May after she formally steps down Friday, according to the poll. Still, the currency will avoid a bigger drop on conviction that Parliament will foil any efforts to leave the EU without a deal.
While the survey sees a hard Brexiteer taking over as the most likely scenario with a 70 percent probability, analysts expect lawmakers to provide a barrier against a no-deal exit.
The pound’s fortunes have ebbed and flowed since the 2016 EU referendum along with the chances of a Brexit deal. With May stepping down after failing to get her agreement with Brussels through a divided Parliament, some of her leadership rivals are trying to put a no-deal exit back on the table as they seek support from a euroskeptic Conservative Party.
“A PM who supports hard Brexit does not necessarily mean a hard Brexit being materialised,” said Petr Krpata, chief EMEA currency strategist at ING Groep NV.
“There appears no majority in the Parliament for hard Brexit and also the PM, when elected, may loosen his or her current hard Brexit stance.” – AFP
Online Reporter