Forex News: Pound Slides After Burnham's Announcement

Pound Slides After Burnham's Announcement

(RTTNews) - The British pound weakened against other major currencies in the European session on Friday, as investors weighed a potential leadership challenge to Prime Minister Keir Starmer from Greater Manchester Mayor Andy Burnham, as well as concerns over inflation risks.

Burnham announced on Thursday that he would try to run in the Makerfield by-election that became available following a colleague's resignation, possibly opening the door for him to take on Starmer.

Investors fear that Burnham's "business friendly socialism" will result in increased government borrowing and expenditure, further taxing Britain's already fragile finances.

Additionally, the European shares traded lower, with inflation concerns and disappointment over U.S.-China trade talks keeping investors on edge.

After wrapping up his three-day visit to China, U.S. President Donald Trump said he will not be much more patient with Tehran.

Hormuz concerns persist despite Iran's Revolutionary Guards claiming around 30 vessels had crossed the strait since Wednesday evening.

In the European trading today, the pound fell to more than 1-month lows of 0.8728 against the euro and 1.3329 against the U.S. dollar, from early highs of 0.8701 and 1.3394, respectively. If the pound extends its downtrend, it is likely to find support around 0.88 against the euro and 1.31 against the greenback.

Against the Swiss franc and the yen, the pound dropped to nearly a 2-month low of 1.0477 and a 9-day low of 211.30 from early highs of 1.0505 and 212.11, respectively. The GBP is likely to find support around 1.03 against the franc and 208.00 against the yen.

Looking ahead, Canada housing starts for April and manufacturing sales data for March, U.S. NY Empire State manufacturing index for May, U.S. industrial and manufacturing productions data for April and U.S. Baker Hughes oil rig count data are slated for release in the New York session.

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