Sterling hammered by Jo Johnson resignation

The British Pound fell sharply against the dollar and the euro following the resignation of Conservative MP Jo Johnson over the pending Brexit deal, underlining the difficulty Prime Minister Theresa May will have in selling the agreement to her own party. 

The sterling which had traded as high as 1.3072 against the US Dollar slipped to 1.2969 at the New York close and to 0.8742 versus the euro having been as high as 0.8692, just two points above Thursday's six month sterling top of 0.8682.  

Mr. Johnson the brother of former foreign secretary Boris Johnson whose resignation on July 9th sent the sterling to a 13 month low in August at 1.2662, said that there needs to a public vote on the terms of the UK's departure from the European Union.   

Mr. Johnson was against the UK leaving the EU during the campaign two years ago and served as Minister for State Transport.  He said the country was "on the brink of the greatest crisis" since the second world war, and that Ms May's settlement left the UK with a choice of "vassalage or chaos." The referendum, he said, should have three choices, endorse Ms May's deal, leave without a deal, or remain in the EU. A second referendum on the departure is anathema to the supporters of Brexit.

Boris Johnson was one of the most prominent and influential of the Brexit advocates. 

Ms May had hoped to convince her cabinet this weekend to back the deal but there appears to be dissension over the terms of the customs union with the EU that is necessary to avoid a trade barrier at the Northern Ireland border with Ireland to the south. 

GBP/USD

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.