Market sentiment: Who cares who wins?
Sterling’s recent fall back below 1.90 against the dollar was attributed by some to the apparent near outbreak of civil war in the UK’s ruling Labour Party. However, since there was little lasting weakness shown against other currencies, most market participants played down the impact that Labour’s shenanigans to oust its leader and UK prime minister Tony Blair had on the pound. Instead, cable’s fall was seen more as a product of unexpected dollar strength.
In fact, whether prime minister Blair was going to become the victim of a modern-day night of the long knives and be replaced by his one-time sidekick and next-door neighbour Gordon Brown really warranted little concern in the market. Similarly, the possibility of a challenge emerging to threaten Brown’s long wait for the top job in British politics has also...
