The Pound Sterling advances some 0.14% on Monday as the US-Iran negotiations laid a “good foundation” according to US Vice President JD Vance, after ending the first round of talks in Switzerland.
Meanwhile, the UK PM Keir Starmer announced its resignation, though the move didn’t spill over to the GBP/USD, which trades solidly at around 1.3250
GBP/USD gains as diplomacy headlines cushion Starmer resignation risks Market sentiment improved since the US and Iran delegations met for negotiations, yet Tehran called for a closure of the Strait of Hormuz due to Israel’s continued attacks on Lebanon. This prompted a reaction by US President Donald Trump, who threatened to attack Tehran if Tehran fulfilled its threats about Hormuz. Political turmoil didn’t weigh on the Pound, which traded higher throughout the day despite Prime Minister Keir Starmer stepping aside and opening nominations for his replacement on July 9.
The leader to succeed him is Andy Burnham, who was recently sworn in as a member of the UK Parliament. Fears that Andy Burnham would become the new PM triggered a jump in UK Gilts earlier this year, but so far, his team has said that he will adhere to the current Chancellor, Rachel Reeves’ fiscal rules. Analysts cited by Reuters said, “We still need to get clarity on what will change if the fiscal rules stay the same.