Commerzbank’s Michael Pfister highlights rising political uncertainty surrounding UK Prime Minister Keir Starmer and the potential succession of Andy Burnham, warning that a drawn-out leadership struggle or a looser fiscal stance could weigh on the British Pound. Pfister notes that if Burnham maintains the status quo, the pound may react positively, but any challenge to fiscal rules could lead to significant depreciation. He remains sceptical about the pound, citing expectations that the Bank of England will leave interest rates unchanged while the European Central Bank (ECB) is anticipated to deliver another rate rise in September, which could push EUR/GBP to higher levels in the coming weeks [1].
Meanwhile, United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann observe that GBP/USD is in a corrective phase after testing April’s low near 1.3160 and rebounding. They expect near-term range trading between 1.3170 and 1.3245, but maintain a negative 1–3 week outlook, seeing potential for a break below 1.3160 as long as resistance at 1.3305 caps the upside. The analysts note that downward momentum has tentatively slowed, but the risk of further weakness persists if the resistance level is not breached [2].
Both sources emphasize ongoing pressure on the British Pound, with Commerzbank focusing on political risks and EUR/GBP upside, while UOB highlights technical weakness against the US Dollar and key support levels. No specific market reactions or trading volumes are mentioned in either article. Forward-looking statements from both banks suggest continued caution and potential for further depreciation of the pound in the near term [1][2].
CONCLUSION
The British Pound faces headwinds from both political uncertainty and technical weakness, with analysts from Commerzbank and UOB expecting further downside against the Euro and US Dollar. Market participants should remain cautious, as risks of depreciation persist amid unresolved political issues and bearish technical signals.