The British market is preparing on Wednesday for more political dramas, when Prime Minister Boris Johnson was shaken by the resignation of the Minister further and called for him to leave, even though the traders were reluctant to take a new position given the uncertainty.
Bets have cut opportunities for the departure of Johnson that will soon occur and analysts say the market has been mostly valued in the exit after a series of scandals, including the accusation that he violated the rules of the COVID-19 locking, weakened his authority.
Pounds fell to more than two years the lowest to the dollar but the movement was mostly driven by broad -based rally in US currencies as investors, worried about increasing the risk of recession, seeking safety.
British shares obtained, bouncing the day after a large loss. Some analysts link profits with the hope of more public expenditure under the new Minister of Finance, but the increase in stock prices is in line with the profits on a wider market.
The rapidly changing economic background, including concerns about weak British economic prospects and soaring inflation, also overshadowing political dramas that took place in Westminster.
For now, financial market reactions have been limited, with markets that focus on international development, including the prospect of recession in the main international economy, tightening global financial conditions and lowering energy lacks,” said David Page, Head of AXA Investment Manager of Macro Research.
However, the longer the British political uncertainty continues, the more we expect to be seen in the British financial markets.”
Johnson’s grip on power weakened after Rishi Sung stopped when the Minister of Finance and Sajid Javid resigned as Health Secretary on Tuesday. There was no reduction on Wednesday with more resignation attached to pressure.
Analysts say the market will fight for direction until they know whether Johnson can overcome storms, or until they have a better understanding of the priority of Nadhim Zahawi, the new Minister of Finance.
In 1545 GMT, Sterling has dropped 0.5% to $ 1,1899, from the lowest level of two years $ 1,1877. Against Euros, Sterling rose 0.5% to 85.46 Pence. Euro has bear the burden of concerns about the economic impact of the soaring price of natural gas.
No Comments Yet