• The Pound Sterling displays sheer strength against its major peers on Friday. The British currency strengthens as the outright victory of Keir Starmer’s Labour Party in parliamentary elections has resulted in the most stable political conditions in the United Kingdom (UK) economy among G-7 nations.
• The outlook for the Pound Sterling has improved, as a stable government results in predictable fiscal policies, which will attract significant foreign inflows. Also, the UK's new Chancellor, Rachel Reeves, pledges to stimulate growth and investment with a major focus on the supply side due to the limited scope of government spending.
• Apart from that, the improved economic outlook and diminished expectations for the Bank of England (BoE) to begin reducing interest rates in August have boosted the Pound Sterling’s appeal. The monthly Gross Domestic Product (GDP) data for May came in higher at 0.4% from the estimates of 0.2% and an unchanged position in April. This has also raised doubts about whether the BoE should pivot to policy normalization in September.