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Tomorrow will be an important event for the United Kingdom and all of Europe – the name of the country's new Prime Minister will be known.
Recall that this post is claimed by two candidates: Former British Foreign Minister Boris Johnson and the current Foreign Minister Jeremy Hunt. The fate of Brexit depends on which of them will take this position: how will the process of withdrawal of Albion from the European Union proceed, whether it will be brought to an end and on what conditions.
On Tuesday, the Conservative Party of Great Britain will announce the name of the new Prime Minister after counting the votes, and on Wednesday, he will enter Downing Street. At the same time, he will immediately have to deal not only with Brexit but also with the conflict in the Persian Gulf, where Iran was detained by a British tanker on Friday.
The chances of winning in the fight for the chair of the head of government B. Johnson, who is ready to withdraw the country from the EU or die, are maximal.
However, the negative from the election campaign and possible problems in the negotiations between London and Brussels have already been included in the quotes. Both houses of the British Parliament managed to ratify the amendment, which will not allow a "hard" divorce from the EU until October 31 without the consent of Parliament.
However, the exit of the country without an agreement with the alliance can become a reality if the early elections of the Parliament significantly replenished with eurosceptics.
The statement by the EU's main Brexit negotiator, Michelle Barnier, that the unit is open to discussing the status of the Irish border inspired investors to buy pounds. Data on retail sales in the UK in June also added a positive, but the growth above the 1.25 mark for the GBP/USD pair is still difficult.
While the EU is ready to offer the United Kingdom an extension of the Brexit deadline after October 31 for negotiations on a future agreement, and too tough B. Johnson's position is unlikely to be appropriate. Against this background, more loyal J. Hunt can get extra points from Tories.
According to experts, in the event of an unexpected victory of John Hunt, the pound will have a chance for a small recovery.
"If the current foreign minister does lead the government, the GBP/USD pair will rise above the level of 1.27 for some time," Societe Generale predicts.
At the same time, the aggressive rhetoric of the new Prime Minister in the person of B. Johnson after taking office can cause a decrease in GBP/USD by 1.5-2 figures from the current levels.
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