The pound is currently trading against the euro at £1.130 and is back in the green.
It follows yesterdays figure of £1.127 with the drop into the red linked to the double resignation of David Davis and Boris Johnson.
Laura Parsons, currency analyst, explained how the pound has improved slightly today.
She told Express.co.uk: “After a Boris-based tumble, the pound bounced back on Tuesday.
“With concerns that Prime Minister Theresa May could be ousted easing, the GBP/EUR exchange rate edged higher.”
Boris Johnson has since congratulated the prime minister on reaching a decision for a Brexit deal
Prime Minister Theresa May’s government fell into chaos following the cabinet shake-up.
Two other cabinet ministers have since quit, with Ben Bradley and Maria Caulfield announcing their resignation minutes before a London press conference.
Boris Johnson has since congratulated the prime minister on reaching a decision for a Brexit deal.
“The pound’s gains weren’t as impressive as they could have been however, with U.K. manufacturing and industrial production figures falling short,” explained Ms Parsons.
According to the Office for National Statistics, UK manufacturing experienced a fall in the first three months to May.
Pound to euro exchange rate has recovered following a government shake-up
Ms Parsons also explained how the pound could pick up further depending on the latest from the Bank of England.
She said: “GBP/EUR returned to trading in the region of €1.131 ahead of today’s speech from Bank of England (BoE) Governor Mark Carney.
“Any clarification on the subject of an August rate hike could be cause for Sterling volatility.”
The UK economy has picked up thanks to the good weather and the World Cup.
Growth has risen to 0.3 per cent in May after a difficult few months following the Beast from the East.
Pound to euro exchange rate: Sterling hit £1.130 today
Pound to euro exchange rate: The UK economy has improved thanks to the World Cup and good weather
This could lead to the Bank of England raising interest rates for the second time in a decade.
It last increased in November 2017 from 0.25 per cent to 0.5 per cent, the first time since July 2007.
The positive UK data could mean it will increase in August to 0.75 per cent.
A rate rise was decided against in May thanks to the colder weather affecting the economy although the latest government instability could hinder next month’s growth.
However, GDP is expected to grow to 0.4 per cent in the second quarter of the year.