ECONOMY

Sterling claws back losses as Boris Johnson wins leadership

The British pound crept up to $1.2474 in early afternoon London deals. (File photo: AFP)

The British pound trimmed its losses Tuesday on the news that Brexiteer Boris Johnson triumphed in the race to become the nation’s next prime minister.

Former London Mayor and front-runner Johnson has defeated Foreign Secretary Jeremy Hunt in the Conservative Party leadership contest and will replace outgoing Prime Minister Theresa May on Wednesday.

In reaction, the pound crept up to $1.2474 in early afternoon London deals.

That was a slender gain from $1.2450 before the announcement but was lower than $1.2476 registered late on Monday.

Sterling nevertheless remains under pressure and is not far from the two-year low of $1.2382 that was struck last week on Brexit fears.

The European single currency meanwhile slid to 89.60 pence on Tuesday’s announcement, from 89.70 beforehand. The euro had touched a six-month peak last week at 90.51.

“As was widely expected, Boris Johnson has been announced as the new UK PM, winning the Tory leadership contest with 66 percent of the vote,” said analyst David Cheetham at trading firm XTB.

“Given that he’s been the frontrunner for quite some time the immediate market reaction has been fairly quiet with the pound remaining under pressure and not far from its lowest level since April 2017 against the US dollar,” he added.

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Last Update: Tuesday, 23 July 2019 KSA 16:27 - GMT 13:27
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