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Tory Leadership Contest Moves Into Penultimate Phase

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

gbpIt is certain that the next leader of the Tory Party, and therefore the next PM, will be a man since the only two female contenders (Esther McVey and Andrea Leadsom) were eliminated after the first vote. The Health Secretary, Matt Hancock, withdrew his candidacy largely because of lack of support. The second round of voting saw the elimination of arguably the most extreme Brexiter in the contest, the former Brexit Secretary, Dominic Raab.

Yesterday saw the third round of voting which eliminated the hitherto little know International Development Secretary, Rory Stewart. Whilst Stewart was campaigning on a platform of delivering Brexit, he was very open about the challenges that produces, the mathematics of likely voting intentions in the Commons and the absolute folly of pursuing a “no deal” Brexit. Many were surprised he got as far as he did.

There are four candidates remaining, Johnson (former Foreign Secretary), Hunt (current Foreign Secretary) Javid (Home Secretary) and Gove (Environment Secretary). It is widely anticipated that Javid will fall at the first hurdle today, but it is unsure who will join Johnson (the runaway leader) in the ballot of party members when the final vote of the day is held.

Johnson is well liked by the party faithful, but was regarded as the worst Foreign Secretary in living memory. He has a reputation as somewhat of a wordsmith, but this doesn’t leave him immune from serious gaffs like suggesting that Muslim women who wear the burka look like letter boxes or suggesting that we should “fuck business” whilst pushing ahead with the Brexit process. He is, however, widely expected to become PM when the postal ballot of members is completed by 22nd July.

Johnson has managed to get support of soft and hard Brexit supporting MPs – a feat which ought to be impossible if he is being sincere with both sides, since the positions are mutually exclusive. He is pledged to pull the UK out of the EU with or without a deal by 31st October 2019. However, a majority in parliament are strongly opposed to a no deal Bexit and business community leaders are horrified at the prospect.

Sterling has shed just under five cents against the Euro since the beginning of May as Forex investors position themselves for a possible chaotic Brexit which will greatly devalue Sterling. The reason that the flight from Sterling hasn’t been stronger is that a further referendum, revocation of Article 50 and/or a general election/change of government are still also all on the cards.

Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

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