Sterling spikes on the back of Truss resignation

Prime Minister Liz Truss confirmed she would be stepping down from her post earlier today, offering sterling a minor boost.

The pound sterling has seen a minor spike following the resignation of Prime Minister Liz Truss.

At one point today sterling peaked at $1.127 against the dollar, later slipping back to $1.1258. The spike however is minor and the UK’s FX markets continue to have a cagey outlook with more turbulence expected to accompany the change of office and the upcoming election process for a new lead of the Tory party.

“The pound has spiked following the Prime Minister’s resignation speech as the market can take some temporary confidence that there will be no more outlandish Truss-like economic policies,” said William Marsters, Senior UK Sales Trader at Saxo.

Liz Truss stepping down signals an end of a catastrophic few weeks for the UK, with the economy beaten down by the now former PM’s ‘growth plan’. Though many will be glad to see the back of Trussenomics, the announcement of a Tory leadership contest next week leads to more uncertainty over who could be next in No.10.”

“Sterling’s game of snakes and ladders is far from over, yet it’s unlikely GBP will show many signs of long-term recovery. The economy is likely to continue to suffer at the hands of rising inflation, which has led to crippling everyday costs affecting households and businesses up and down the UK, reiterated by yesterday’s stubbornly high CPI announcement,” said Marsters.

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