July 9, 2018 / 2:22 PM / in 12 days

Sterling slides after foreign minister Johnson resigns

LONDON (Reuters) - Sterling skidded lower on Monday after British foreign minister Boris Johnson resigned, with the pound falling versus the dollar and the euro.

FILE PHOTO: UK pound coins plunge into water coloured with the European Union flag colours in this illustration picture, October 26, 2017. REUTERS/Dado Ruvic/File Photo

Johnson followed former Brexit minister David Davis in resigning. Davis had resigned in opposition to Prime Minister Theresa May’s plan for life after leaving the European Union.

The pound fell from around $1.3340 to trade as low as $1.3259, down 0.2 percent the day, after news of Johnson’s resignation.

Against the euro sterling fell 0.4 percent to trade down at 88.62 pence per euro.

“What we say is the pound can handle ministerial resignations if that’s the extent of it... if it means Johnson leaving and not launching a leadership challenge,” ING strategist Viraj Patel said.

He added, however, that a leadership bid by Johnson would open up further uncertainty.

Britain’s internationally-exposed FTSE 100 extended gains slightly as the pound weakened.

Reporting by Tommy Reggiori Wilkes, Sujata Rao and Helen Reid

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