Investor confidence in the pound strengthens after the incoming UK prime minister commits to existing fiscal rules set by Chancellor Reeves.
The British pound rose 0.4% against the US dollar to 1.3244 on Monday, recovering from daily lows of 1.3188. The move followed remarks by Andy Burnham, set to become the next UK prime minister, who pledged adherence to fiscal rules established by Chancellor Rachel Reeves.
The GBP/USD pair was also supported by broader US dollar weakness, with the US Dollar Index (DXY) down 0.2% at 101.15. Burnham confirmed he would follow the Labour Party’s 2024 manifesto, easing market concerns over potential fiscal loosening.
Despite the gains, traders remain cautious ahead of the UK’s Q1 2026 GDP release. US markets will focus on upcoming jobs data and the ISM Manufacturing PMI later this week.