Sterling is still up against several major currencies this year, but momentum is fading

Sterling has made it through Britain’s latest political disaster and global tension without falling apart, but the pound is losing steam as the U.K. falls behind the change toward higher rates.

So far this year, the currency is up roughly 1.6% against the euro, 2.8% against the Swiss franc, 4.9% against the Swedish krona, and 1% against the Canadian dollar.

Against the U.S. dollar, it has barely moved, while the Japanese yen is ahead by 1.3%. Sterling is still beating several major currencies this year, even though that run is starting to cool right now.

Political events in Britain have not led to a meaningful sell-off in the pound. The resignation of Prime Minister Keir Starmer on July 20 paved way for the UK’s seventh prime minister in the span of 10 years. Labour acted quickly and got Andy Burnham to Downing Street.

Markets are interested in Andy’s fiscal plans, particularly whether the new government will continue to adhere to the “fiscal rules” as defined by Finance Minister Rachel Reeves.

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