Euro gains amid UK political turmoil

Sterling fell sharply against the dollar and euro yesterday, hurt by a new bout of political uncertainty that soured the outlook for a currency already reeling from weeks of turmoil over whether Britain will stay in the EU.

The resignation of Brexit supporter and works and pension secretary Iain Duncan Smith on Friday over planned welfare cuts proposed in last week’s budget highlighted a deepening rift within the ruling Conservative Party just three months before a referendum that will determine Britain’s future in the EU.

The uncertainty drove sterling to seven-year lows in late February and traders said the stark division within the ruling party did not bode well for the pound.