Forex News: Pound Rises After U.K. PM Starmer's Resignation

Pound Rises After U.K. PM Starmer's Resignation

(RTTNews) - The British pound strengthened against other major currencies in the European session on Monday, after Sir Keir Starmer, the leader of the Labour Party and prime minister of the United Kingdom announced his resignation.

PM Starmer made an appearance outside 10 Downing Street to announce his retirement. He also promised to support the future prime minister and stated that he will continue to head the party until a new leader is chosen.

With his leadership in doubt after suffering a crushing setback in May's local elections, the decision was widely anticipated. The most qualified contender to succeed Starmer is Manchester Mayor Andy Burnham.

The retirement of Starmer and the probable nomination of Andy Burnham as prime minister are heavily priced into U.K. assets. The bank contends that a sustainable improvement in Pound performance depends on increased cross-border interest, which may wait for a new Chancellor, even though higher fiscal momentum is reflected in gilt yields.

In the European trading today, the pound rose to nearly a 2-week high of 1.0703 against the Swiss franc and a 5-day high of 214.23 against the yen, from early lows of 1.0663 and 213.21, respectively. If the pound extends its uptrend, it is likely to find resistance around 1.08 against the franc and 216.00 against the yen.

Against the euro and the U.S. dollar, the pound advanced to 4-day highs of 0.8651 and 1.3248 from early lows of 0.8680 and 1.3184, respectively. The pound may test resistance around 0.85 against the euro and 1.34 against the greenback.

Looking ahead, Canada CPI data for May and Eurozone flash consumer confidence for June are slated for release in the New York session.

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