Sterling slid on Monday after the resignation of the British foreign minister heaped pressure on Prime Minister Theresa May, but its losses were expected to be contained unless a full-blown leadership challenge materialized.
Boris Johnson followed Brexit minister David Davis in resigning in opposition to May’s hard-fought blueprint for how Britain is to structure its relationship with the European Union after its leaves the bloc in March.
That plan – announced on Friday – has been welcomed by markets, which believe it made the “soft Brexit” favored by businesses and investors more likely.
Sterling had traded higher before Johnson’s resignation as investors speculated May would find it easier to negotiate with Brussels without opponents to her vision of Brexit inside her cabinet.
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