This archive report was first published on 23 July 2019.
July 23, 2019
The British pound erased its morning losses after Boris Johnson won the Conservative Party leadership, paving the way for a no-deal Brexit.
Johnson, a staunch Brexit supporter, has vowed to take Britain out of the European Union on October 31, with or without a deal.
Before the news, the pound dipped to $1.2418, its lowest level since April 2017, due to fears of a no-deal Brexit.
However, the pound recovered its losses and made gains against the dollar and euro.
"The immediate market reaction has been fairly quiet," said David Cheetham, chief market analyst at XTB online brokerage. "The fate of the new PM's tenure and of the pound for the coming months will be almost solely determined by Brexit developments."
Johnson faces a tough negotiation with EU leaders, who have indicated that the Brexit deal negotiated by outgoing Prime Minister Theresa May is not open to renegotiation.
Despite the uncertainty, the London stock market rose, driven by the weak pound, which makes exports cheaper for buyers using stronger currencies.
Asian stock markets also rose, tracking gains on Wall Street, driven by a positive earnings season and speculation about trade talks between the US and China.
