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British Pound Latest – UK PM Boris Johnson is Set to Resign, GBP Unfazed

British Pound Latest – UK PM Boris Johnson is Set to Resign, GBP Unfazed

Nick Cawley, Strategist

GBP/USD - Prices, Charts, and Analysis

  • Boris Johnson expected to hand in his notice after a swathe of Tory MPs resign
  • PM Johnson has led the UK government since July 2019.

Boris Johnson is expected to hand in his resignation today, according to a raft of well placed media sources, sparking a new leadership contest. Johnson has been under extreme pressure to quit after a series of gaffes left his position untenable.

The latest talk is that Boris Johnson will resign later today but will stay on as caretaker Prime Minister until a new leader is chosen in the Summer.

Sterling is little changed against a range of currencies with expectations that the PM would have to resign in the coming days already priced in. GBP/USD is near a fresh multi-month low, due mainly to the strength of the US dollar. The US dollar basket (DXY) printed a fresh 20-year high on Wednesday.

GBP/USD Daily Price Chart – July 7, 2022

British Pound Latest – UK PM Boris Johnson is Set to Resign, GBP Unfazed

Boris Johnson’s position has been under heavy scrutiny over the past months due to a series of scandals and poor decisions. Mr. Johnson was the first UK Prime Minister to be sanctioned while in office when he was fined for breaking lockdown measures, while his actions were said to be partially responsible for the Conservative's poor showing at the 2022 local elections. In early June, MPs called for a confidence vote in Mr. Johnson over allegations that he misled Parliament. Boris Johnson won the confidence vote by a smaller-than-expected 211 votes for to 148 votes against.

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For all market-moving economic data and events, refer to the DailyFX calendar

Retail trader data shows 77.84% of GBP/USD traders are net-long with the ratio of traders long to short at 3.51 to 1. The number of traders net-long is 0.54% higher than yesterday and 10.68% higher from last week, while the number of traders net-short is 8.11% higher than yesterday and 15.90% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed GBP/USD trading bias.

What is your view on the British Pound – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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