GBP fell again on Friday as investors trimmed their positions after Brexiteer Boris Johnson moved closer to becoming the next prime minister, with sterling on track for its sixth week of losses versus the euro.
Sterling has fallen in recent weeks as the contest to succeed Prime Minister Theresa May heats up. Investors are concerned that May’s successor will lead Britain out of the European Union with no deal in place on their future trading relations.
They are also worried about how little time whoever takes over will have to try to renegotiate May’s withdrawal agreement with Brussels. The EU says the deal is not up for renegotiation before Britain is scheduled to exit on Oct. 31.
Johnson, the face of the official Brexit campaign in the 2016 referendum, on Thursday won by far the largest number of votes in the first round of the Conservative party leadership contest. Betting markets give Johnson a 70% probability of winning.
The new prime minister should be chosen by the end of July. The seven remaining candidates to lead the Conservatives will be whittled down to two by lawmakers before a postal ballot of the wider party membership is held to select the new leader.
GBP slipped 0.2% against the euro to 1.1221, putting it on track for its sixth consecutive week of losses against the euro, its longest losing streak of the year. On Tuesday sterling hit a five-month low of 1.1195.
Versus the dollar the pound slipped 0.4% to 1.2616, with most of the losses following the release of U.S. retail sales data that triggered some buying of the greenback.
This morning GBPEUR is trading at 1.1227 and GBPUSD holding below 1.2600 at 1.2592.