LONDON- Sterling was a touch firmer against the euro and dollar on Monday after British Prime Minister Rishi Sunak sacked his interior minister, Suella Braverman, a government source said.
The moves in currency markets were modest and analysts said the direction for sterling in the near-term would be driven by economic data and the outlook for the U.S. dollar.
The move by Sunak was part of a wider reshuffle after Braverman criticised the police’s handling of a pro-Palestinian march.
Sunak is expected to carry out a wider number of changes in his cabinet, bringing in allies and removing some ministers who his Downing Street office say have not been performing as well as he wanted in their departments.
Sterling was last trading at $1.2251, 0.2% higher on the day. Against the euro, the pound stood at 87.29 pence — also higher on the day.
Benchmark 10-year UK gilt yields were flat on the day at 4.343%, narrowly off a session high of 4.363%.
“Cabinet reshuffles are a domestic political issue,” said Geoff Yu, senior macro strategist at BNY Mellon.
“Any shift in the finance ministry is unlikely, so for sterling, the outlook is really about the dollar.”
(Reporting by Dhara Ranasinghe; Editing by Amanda Cooper)
