Sterling Edges Up as Starmer Resigns; US-Iran Deal Optimism Holds
Sterling recovered modestly after UK PM Starmer announced his resignation, while the dollar held steady as markets remained cautiously optimistic about the US-Iran deal progress.
Sterling edged higher on Monday after UK Prime Minister Starmer announced his resignation, ending a period of political uncertainty. GBP/USD rose from 1.3190 to 1.3230 as the market welcomed the clarity, though gains were modest. The dollar held steadier overall, with early session gains fading slightly as traders balanced geopolitical developments.
The resignation came as a surprise, but the transition plan—Starmer staying until a successor is elected—provided a sense of order. The likely successor, Andy Burnham, is seen as market-friendly, which supported sterling. Meanwhile, the broader market mood remained driven by US-Iran deal optimism. US officials continued to talk up the agreement, keeping risk sentiment cautiously positive. For currency traders, this dynamic has kept the dollar bid but capped its upside, as the prospect of reduced geopolitical risk weighs on safe-haven demand. The combination of UK political clarity and US-Iran progress has created a mixed backdrop for major pairs. For the latest pricing on GBP/USD and other major pairs, check NowPrice's forex page.
Looking ahead, the focus will shift to the actual details of the US-Iran deal and any further political developments in the UK. Traders will also watch for any comments from the Bank of England regarding the political transition. On the data front, US durable goods orders and consumer confidence figures later this week could provide further direction for the dollar. The path of least resistance for sterling appears tilted to the upside, but sustained gains will require continued positive news flow on both the political and geopolitical fronts.