NEW YORK: The pound reversed course Wednesday and gave up much of previous gains after a new British government was formed by Prime Minister Theresa May with Philip Hammond as finance minister.
The pound had surged Tuesday on news of a quick political handover in London after the shock vote to exit the European Union had raised worries of a long wait before a new leadership took control.
On Wednesday the currency gave up 0.8 percent on the dollar at $1.3144 and 1.0 percent on the euro at 84.36 pence.
While the selection of pro-Brexit campaign leader Boris Johnson as foreign minister dismayed some, Hammond was seen as a good choice as chancellor of the exchequer.
Though an EU critic, Hammond had argued against a breakup as foreign minister in the David Cameron government before the June referendum.
The job will put him at the center of negotiations with the EU on Britain s departure.
Analysts said his understated style is likely to reassure investors given the volatility of the markets and fears of a recession sparked by the Brexit decision.
Meanwhile the euro edged higher against the dollar, but at $1.1089 was within the pair s range since the end of June.