The Queen made a name for herself because she was a strong leader. Her successor, Charles, appears to be more of a playboy than a monarch judging by his past behaviors and actions. Although the monarch has very limited real power, future publicity gaffes such as his handling of Diana and marriage to a deeply unpopular Camilla could blow back much more strongly on the UK as a whole and create what could potentially be a lot of political instability out of thin air.
Why? There have always been those who opposed the monarchy. As long as Elizabeth was bearing the title, she was well loved and respected, and these voices remained not much more than background noise. From those I’ve spoken to in the UK, Charles does not carry anywhere near the same amount of love or respect. My theory is that this will cause the anti-monarchists to take advantage of any misstep he makes and renew calls for the abolition of the monarchy.
If these calls are heeded, it may create turmoil as the UK’s system of government will likely be forced to essentially reorganize completely. If there’s one thing markets hate more than rate hikes, it’s political instability, so I would be on the lookout for signs that this is brewing and look into puts on the Pound and on larger UK companies if it seems likely that this scenario will come to pass.
All that said, this point is moot if the crown skips Charles and goes to his son William. William is much more like his grandmother than his father, and carries considerably more goodwill from the people. I would be looking for market strength in this circumstance, but it’s highly unlikely as Charles has been waiting for his chance to wear the crown since 1952 and he wants his turn.