The GBP/USD pair recovers some of its early losses, but is still 0.1% down to near 1.3220 during the early European trading session on Monday.
The pair remains under pressure amid renewed United Kingdom (UK) political uncertainty after comments from United States (US) President Donald Trump that Prime Minister (PM) Keir Starmer could resign on failing to fix immigration and energy issues. “Keir Starmer will resign as Prime Minister of The United Kingdom
He failed badly on two very important subjects- IMMIGRATION AND ENERGY (OPEN NORTH SEA OIL!). I wish him well!,” US President Trump wrote in a post on Truth Social. Meanwhile, calls from Labour lawmakers against PM Starmer continuing UK leadership have also accelerated, following Andy Burnham’s strong win in the Makerfield constituency in north-west England.
A Reuters report has shown that UK PM Starmer could decide as early as Monday whether to remain in office and fight a leadership contest or begin the process of stepping down. Also, an upbeat US Dollar (US) due to increased expectations that the Federal Reserve (Fed) could deliver two interest rate hikes this year is also keeping Cable under pressure. According to the CME FedWatch tool, the odds of the Fed delivering at least two interest rate hikes this year is 58.5%, a sharp increase from 17.1% seen a week ago.