Sterling falls as Keir Starmer’s resignation fuels uncertainty over UK fiscal policy and leadership transition.
The GBP/USD pair declined to 1.3245 in early Asian trading, pressured by political instability in the UK. Prime Minister Keir Starmer resigned after Labour’s by-election loss, triggering a leadership contest.
Markets are assessing potential shifts in fiscal policy under new leadership, with concerns that relaxed rules could strain UK bonds and weaken the pound. Analysts warn of further downside if fiscal discipline wavers.
The US dollar remains supported by expectations of a December Fed rate hike, with odds rising to 89% after hawkish signals from new Fed Chair Kevin Warsh.