The Pound Sterling reverses course and turns negative on the day as Andy Burnham is named the new Prime Minister and reassures that he will stick to the fiscal rules set by the former Chancellor, Rachel Reeves, who just resigned.
The GBP/USD trades at 1.3425, after hitting a daily high of 1.3481
GBP/USD slides as Burnham transition meets Oil-driven Fed risks Sentiment turned upbeat, even though hostilities in the Middle East continued. Attacks between the US and Iran keep tensions high, keeping investors worried about a disruption in Oil supply, which the US crude oil benchmark, WTI so far up 21% in the month. This reignited speculation that the Federal Reserve could increase rates by 25 basis points towards the end of the year.
In the UK, the new PM, Andy Burnham, said he would not take risks with the economy, appealing to the previous government’s fiscal rules set by Reeves, who recently resigned. However, he reiterated that he would take measures to reduce the high cost of living. In the meantime, market participants would remain aware of the naming of the new UK Finance Minister, though rumours point towards Shabana Mahmood, an interior minister, according to the Financial Times.