The pound rallied on Tuesday as Downing Street said the UK prime minister was “stable” and breathing without a ventilator after being admitted to intensive care due to novel coronavirus.
Boris Johnson was moved to an intensive care unit of St Thomas’ Hospital in Westminster on Monday night. The Queen and leaders around the world sent their best wishes, with US president Donald Trump calling Johnson a “very special” leader who “doesn’t give up.”
Foreign secretary Dominic Raab will “deputise where necessary” while Johnson receives care, according to a Downing Street spokesperson.
Raab chaired a meeting of ministers in Johnson’s place on Tuesday and Raab said during Downing Street’s daily press briefing that the prime minister was “receiving the very best care” and “remains in good spirits”.
Raab added that Johnson was receiving “standard oxygen treatment” and not taking an invasive treatment, such a ventilator.
“I’m confident he’ll pull through because if there’s one thing I know about this prime minister, he’s a fighter,” Raab said.
Earlier in the day, a Downing Street spokesperson said Johnson was in a stable condition, receiving “standard oxygen treatment and breathing without any other assistance.” The spokesperson added that Johnson did not have pneumonia.
The updates on the prime minister’s condition appeared to reassure investors on Tuesday, sending sterling higher.
Sterling was trading 0.9% higher against the dollar (GBPUSD=X) on Tuesday evening.
The pound had dipped when Johnson was first admitted to hospital on Sunday and then again when he was moved to intensive care on Monday.
"Certainly, losing the head of government is not going to inject 'confidence' into the FX market, but government policy in a non-presidential system is ultimately crafted by the prime minister and his/her close advisers," Stephen Gallo, head of European FX strategy at BMO Capital Markets, told Reuters.
"It’s also far too early to know what the prime minister being incapacitated or not making it out of the hospital will mean for UK economic and Brexit policy three to six months out.”
Number 10 said chancellor Rishi Sunak was next in line to deputise if Raab also fell ill, with several cabinet members diagnosed with COVID-19 or self-isolating in recent weeks.
The boost to the pound also reflected a weakening of the dollar. The US currency had seen gains in recent weeks as a safe haven with the pandemic causing global economic turmoil.
But investors’ nerves eased slightly on Tuesday with signs new infections could be peaking in Europe.