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British pound falls day after Truss' resignation

Outgoing British Prime Minister Liz Truss leaves No.10 Downing Street on Wednesday. The British pound fell a day after her resignation on Thursday. Photo by Hugo Philpott/UPI
Outgoing British Prime Minister Liz Truss leaves No.10 Downing Street on Wednesday. The British pound fell a day after her resignation on Thursday. Photo by Hugo Philpott/UPI | License Photo

Oct. 21 (UPI) -- The upheaval in British politics has filtered down to its currency, with the pound tumbling 0.6% against the U.S. dollar and euro at the close of markets Friday.

The FTSE 100 index closed with the pound at $1.1168 against the U.S. dollar and 1.1404 against the euro. The FTSE, though, was up overall, with a 0.25% gain to 6,962. The positive results come as markets in France, Germany and Italy closed lower at the end of trading Friday.

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Jane Foley, a currency strategist at Rabobank, said that while the tax cut proposal originally proposed by outgoing Prime Minister Liz Truss appears to be completely off the table, uncertainty will continue to roil to British markets.

"While sterling rallied yesterday on Truss's resignation, I think investors have realized today that it's not a guarantee that we'll get a market-friendly outcome from the Conservative leadership contest," Foley said, according to BBC News.

A new report released by the British government Friday said retail sales in the country fell by 1.4% in September 2022, below pre-COVID-19 February 2020 levels.

"While retailers continue to mention the effect of rising prices and the cost of living on sales volumes, data for September 2022 are also affected by the bank holiday for the state funeral of Her Majesty Queen Elizabeth II, when many retailers closed," the report said.

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