Pound Sterling Rally Stalls after PM Truss Throws Towel with Resignation

Image © Gov.uk. Picture by Simon Dawson / No 10 Downing Street.

Pound Sterling exchange rates were volatile throughout Thursday trading when an earlier Dollar-induced rally stalled momentarily following the announced resignation of Prime Minister Lizz Truss, which is set to be followed by an undisclosed process that will determine her replacement.

Prime Minister Lizz Truss announced near the North American open on Thursday that she will remain in office for a period of one week as a process is carried out in order to determine who will replace her at the head of the governing Conservative Party and in 10 Downing Street.

"I cannot deliver the mandate on which I was elected by the Conservative Party"

UK Prime Minister Liz Truss resignshttps://t.co/O5kO1WJ4tY pic.twitter.com/Gq6FtOGNIP

— BBC Breaking News (@BBCBreaking) October 20, 2022

This comes toward the tail end of a month of rebellion against the newly-selected Prime Minister and seemingly led by former ministers who did not make selection for the new cabinet or final stage of the recent party process.

The Pound had been trading higher against most major currencies ahead of the announcement after having yo-yoed between the top and bottom of the major currency league table throughout the session.

The below chart shows how the rally appeared to stall in the wake of the announcement and is followed by a transcript of the full statement from the outgoing Prime Minister, the original copy of which can be accessed here.

Above: Pound to Dollar rate shown at 15-minute intervals. Click image for closer inspection.

I came into office at a time of great economic and international instability.

Families and businesses were worried about how to pay their bills.

Putin’s illegal war in Ukraine threatens the security of our whole continent.

And our country had been held back for too long by low economic growth.

I was elected by the Conservative Party with a mandate to change this.

We delivered on energy bills and on cutting national insurance.

And we set out a vision for a low tax, high growth economy – that would take advantage of the freedoms of Brexit.

I recognise though, given the situation, I cannot deliver the mandate on which I was elected by the Conservative Party.

I have therefore spoken to His Majesty The King to notify him that I am resigning as Leader of the Conservative Party.

This morning I met the Chair of the 1922 Committee Sir Graham Brady.

We have agreed there will be a leadership election to be completed in the next week.

This will ensure we remain on a path to deliver our fiscal plans and maintain our country’s economic stability and national security.

I will remain as Prime Minister until a successor has been chosen.

Thank you.