The inauguration of Andy Burnham as head of the British government is accompanied by a moderate rise in the pound sterling, with the markets remaining attentive to his economic orientations.
The British currency is up slightly against major currencies on Monday, the day new Labor leader Andy Burnham takes office as Prime Minister of the United Kingdom, succeeding Keir Starmer. The arrival of Keir Starmer’s successor is particularly scrutinized by the market, which is awaiting details on the policy he intends to pursue.
Around 9:05 a.m. GMT, the pound gained 0.06% against the greenback, to 1.3460 dollars per pound, and 0.08% against the single European currency, to 84.95 pence per euro. Forex traders will also watch closely the new government which should be announced in the afternoon, in particular the successor to Rachel Reeves as Minister of Finance.
“The pound sterling has been doing rather well recently, with the idea that Burnham will choose a more responsible chancellor (than initially expected, editor’s note) on the budgetary level in the person of Shabana Mahmood”, until now at the Interior, where she has pursued a very firm policy on immigration, explained Chris Turner, analyst at ING.
However, the pound has already incorporated a lot of bullish information, “which should limit its potential”, estimated Lee Hardman, analyst at MUFG. He also said: “It is slightly surprising not to see the dollar a little stronger.” According to him, “signs of US inflation in June being lower than expected” helped to dampen expectations of a rate hike by the Fed, limiting the upward effect of the rebound in oil due to the war in the Middle East.
The American currency remained almost stable against the euro, at 1.1435 dollars per euro.
