Boris Johnson launch analysis: Three statements that may lift GBP/USD

Former foreign secretary Boris Johnson has let his opponents sweat and has finally launched his campaign to lead the Conservative Party and the country. He said that the UK must leave the EU by October 31st – as expected – thus respecting the will of the British people. He also lamented the failure to do so until now.

Stock markets and the British pound dislike Brexit, and especially the specter of a no-deal Brexit and Johnson is undoubtedly the leading candidate. He has convinced the hardline European Research Group (ERG) to back him and not Dominic Raab – which has offered a harder stance on Brexit. The packed room of MPs that have come to his event also included members who support a softer Brexit. 

Overall, Johnson will very likely appear on the shortlist of two candidates that will be voted on by the Tory membership. And there – according to all polls – he is very popular.

If Johnson is the leading candidate and he supports leaving even without a deal, the pound has room to fall. 

However, Sterling may still shine on a few softer words from the leading candidate.

1) Johnson does not want a no-deal

In his opening remarks, the contender said there he does not aim for leaving without an agreement. In addition, he said he does think it will come to that. 

That has caused an instant rise in the pound and more may be in store.

2) Uniting the country

Markets were looking for any Brexit-related headlines, but Johnson's repetitive message was that he wants to unite the country. Political analysts may have raised an eyebrow after hearing these remarks – Johnson's long political career includes a long list of blunders.

Nevertheless, his message of unity implies finding a compromise rather than opting for a hard Brexit, which may further divide the nation.

3) Not quitting on no-Brexit

Heather Stuart of the Guardian has asked Johnson if he would resign in case he was unable to deliver Brexit by October 31st.

He has dodged the question and went on to talk about other topics – and that was the last question he allowed – thus not enabling a followup question by another journalist. 

His refusal to provide a straight answer may go to show that his desire to stay in office may be longer than his lust for Brexit. By avoiding a straight answer, Johnson may be opening the door to extending Article 50.

Conclusion

Overall, Johnson may be campaigning for Brexit to win support among his colleagues in parliament and later among the membership, but does not seem to be willing to die on his sword for the cause.

More GBP/USD: If Boris Johnson becomes PM, volatility will rise, but Sterling may not necessarily suffer