The pound rises after reports that Prime Minister Johnson is preparing to step down

Pound sterling up 0.5% against the dollar and 0.3% against the euro

The pound sterling bounced slightly on Thursday after reports that British Prime Minister Boris Johnson will soon step down, with traders cheering the prospect of reduced political uncertainty.

However, gains against the dollar and the euro were modest as a spate of ministerial resignations this week made Johnson’s exit all but inevitable and largely priced in by markets. British assets were broadly calm when Johnson lost support this week as the worsening global economic backdrop is seen as much more important.

Against the dollar, the pound rose to $1.1994 by 0809 GMT, climbing 0.6% to a daily high from $1.1938 before news broke that Johnson would step down.

By 09:15 GMT, the pound was at $1.1968, having strengthened throughout the day. On Wednesday, the pound hit a March 2020 low at $1.1887.

Against the euro, the pound rose to 85.11 pence, a three-week high.

„We can expect some relief to be reflected in the British currency as more details on Johnson’s plan to step down are announced. Financial markets prefer certainty and this situation is no different,” said Mike Owens, global trade trader at Saxo Markets. .