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Pound Little Changed; Boris Johnson Chosen as New U.K. Leader

Investing.com - The British pound was little changed against the U.S. dollar on Wednesday in Asia following news that Boris Johnson was chosen as the new U.K. leader.

The GBP/USD pair last traded at 1.2429 by 11:30 PM ET (03:30 GMT), down 0.04%.

Johnson, known for his hardline stance on Brexit, was named Prime Minister and leader of the Conservative Party. Johnson defeated Jeremy Hunt by a margin of 2 to 1.

Johnson said after the announcement on Tuesday that he would unite Britain.

“Like some slumbering giant we are going to rise and ping off the guy-ropes of self-doubt and negativity with better education, better infrastructure, more police, fantastic full-fiber broadband sprouting in every household. We are going to unite this amazing country and we are going to take it forward,” he told the audience.

“I know that there will be people around the place who will question the wisdom of your decision and there may be some people here who still wonder what they have done, and I will just point out to you that no one party, no party has a monopoly of wisdom.”

Johnson has recently insisted that the U.K. must leave the EU on Oct. 31 “do or die, come what may” despite widespread concern over a “no-deal” Brexit.

Meanwhile, the U.S. dollar surged towards four-week highs on Tuesday after U.S. President Donald Trump and Congress struck a deal to raise the debt ceiling, easing fears of the government defaulting.

The dollar was also supported by news that the officials from the U.S. and China will begin in-person trade talks sometime next week, although reports suggested that it could take at least months to agree on a trade deal.

In other news, the International Monetary Fund reduced its global growth outlook for the second time this year.

The world economy will expand 3.2% this year and 3.5% next year, the fund said in its latest quarterly World Economic Outlook released Tuesday. Both rates were down 0.1% from the funds’ April projections.

“The projected growth pickup in 2020 is precarious, presuming stabilization in currently stressed emerging market and developing economies and progress toward resolving trade policy differences,” the IMF said.

“The principal risk factor to the global economy is that adverse developments - including further U.S.-China tariffs, U.S. auto tariffs, or a no-deal Brexit - sap confidence, weaken investment, dislocate global supply chains, and severely slow global growth below the baseline,” the IMF said.

The USD/JPY pair was near flat at 108.18.

The AUD/USD pair and the NZD/USD pair were down 0.3% and 0.1% respectively.







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