- Pound weakens on UK political uncertainty
- One of the worst performing G10 currencies week-to-date
- MP's calling for Starmer to step down
- Political uncerntainty -> higher fiscal risk premium -> bearish pound
- GBPUSD under pressure within 200 pip range
While the world holds its breath for Trump and Xi to shake hands, the Pound is quietly having a meltdown.
GBP is down against nearly every G10 currency this week.
WHY?
Two words: Political uncertainty.
Nobody knows who’s running the UK right now.
This chaos is prompting traders to sell the Pound faster than Starmer can say “I’m not going anywhere”.
92 Labour MPs are calling for his departure following a historically bad local election showing last week.
THE LOWDOWN
Starmer told his cabinet on Tuesday that essentially, he is staying put.
Bold move. Whether anyone believed him is another story entirely.
Because here's the thing, with so many MPs already pushing for the exit door.
At this point, the question is whether NOT if there will be a leadership contest.
BETTING MARKETS PREDICTIONS
Source: Polymarket
GBPUSD OUTLOOK
GBPUSD remains under pressure on the daily timeframe thanks to political fog.
Higher political uncertainty -> higher fiscal risk premium -> sterling under pressure.
BULLISH: Should the 100-day SMA prove reliable support, prices may rebound back toward 1.3650.
BEARISH: Weakness below the 100-day SMA at 1.3480 may open a path toward 1.3450 and the 200-day SMA.
