Pound to dollar exchange rate: Sterling sinks after Boris Johnson resigns as Foreign Secretary
The pound sank in value after Boris Johnson resigned as Foreign Secretary dealing a further blow to Theresa May’s government.
Sterling had made small gains on Tuesday despite Brexit Secretary David Davis’ resignation, with traders interpreting his departure as increasing the chances of a so-called "soft Brexit".
Mr Johnson's resignation sent the pound tumbling into the red, down 0.1% against both the dollar and euro at 1.32 and 1.12 respectively in afternoon trade.
Connor Campbell, financial analyst at SpreadEx, said: "With that being two Cabinet resignations in less than 24 hours, the pound began to fret about the chances of a formal challenge to Theresa May's leadership from inside the Tory party, and the subsequent potential for another general election.
"To be fair to sterling, however, it avoided falling off a cliff like it might well have done, instead producing a more measured reaction to the day's twists and turns."
Pound erases some gains after Johnson's resignation https://t.co/fnCGRN4hB4 pic.twitter.com/1htsSBXCI1
— Bloomberg Markets (@markets) July 9, 2018
FTSE 100 is trading up on news of Boris Johnson's resignation from British gov. The pound, however, is rapidly falling in value against the dollar and euro.
— Olivia Feld (@oliviafeld) July 9, 2018
The resignations of the two Cabinet "big beasts" comes just days after Mrs May secured senior ministers' agreement at Chequers for a Brexit plan about which both men had expressed reservations.
Mr Davis was first to go, announcing his exit just before midnight on Sunday.
But there was growing speculation about Mr Johnson's plans on Monday after he failed to attend a meeting of the Government's Cobra emergencies committee as well as a summit of Western Balkan nations being held in London.
At 3pm on Monday, a statement was issued by Downing Street to say: "This afternoon, the Prime Minister accepted the resignation of Boris Johnson as Foreign Secretary. His replacement will be announced shortly. The Prime Minister thanks Boris for his work."
Staunch Brexiteer Dominic Raab was named as Mr Davis's replacement as Secretary of State for Leaving the EU.