GBP doesn't like what Boris Johnson is saying
Cable staged a rally on May's resignation announcement but the 50-pip pop has now completely faded and cable is now lower since London arrived.
The latest selling came as Boris Johnson highlighted some of the Brexit risks. He said they must prepare for a no-deal Brexit and that's the best way to get a better deal.
The leadership race is going to lead to some additional uncertainty but all that really matters is if the EU is willing to re-open negotiations. If not, the UK is right back where it was with May.
As for a hard Brexit, I'm convinced there is no real scenario where it happens. Boris can promise it or say it's on the table but at least 20% of Conservative MPs will never support it and maybe as much as 50%. The EU will call that bluff all day long.
Ultimately, a different leader isn't going to change the dynamic because all parties and MPs are far too dug-into positions. The best bet for the new leader (whoever he/she might be) is to work on the political declaration and then take another crack at getting May's deal through. That's still a longshot and the only way I can see forward is another referendum or election.
In the meantime, all the talk and promises during the leadership contest are going to be noise and will make it tough for any meaningful GBP bounce.
