Another set of Brexit plot twists for the U.K. dragged the pound deeper in the red zone as the possibility of a “no deal” exit seemed stronger with May’s resignation.
Race for Prime Minister spot
In the absence of major economic releases from the U.K. this week, all eyes and ears are likely to be on Brexit developments, particularly the hunt for the next Prime Minister.
ICYMI, Theresa May decided to quit her post after her last-ditch effort to get the transition deal approved resulted in yet another failure. This leaves the Brits with a divided Tory party and still no plans for its post-Brexit relationship with the EU.
A number of folks are already interested in the leadership position, namely former London mayor Boris Johnson, former Brexit Secretary Dominic Raab, Michael Gove, Jeremy Hunt, Rory Stewart, and Andrea Leadsom.
Keep in mind that PM May will stay on until June 7, and the Conservative Party has said that the nominations for the next head will likely close on June 10. From there, the party will whittle down these ballots to just two contenders, likely by the end of the month.
This should give the new PM roughly four months to come up with a transition deal that would pass parliament. Oh, and also note that the EU has insisted that they won’t be entertaining any changes to the deal they’ve previously approved.
In any case, this might shape up to be another Brexit-dominated week for sterling pairs, which could mean more volatility than usual.
Missed last week’s price action? Read GBP’s price recap for May 20-24!