Keir Starmer has resigned as Prime Minister this morning in a televised statement, following Andy Burnham’s convincing Makerfield by-election win last week and mounting pressure from within his own party. This clears the path for the country’s seventh Prime Minister in a decade. A Labour leadership contest will now follow, with Andy Burnham the frontrunner. Markets dislike political uncertainty, and sterling is already feeling the pressure this morning.
Looking further afield, a US-Iran peace deal signed last week has pushed oil prices lower, welcome relief after months of rising energy costs, though experts caution the full benefit will take time to feed through.
For anyone with an international transfer in the pipeline — whether you’re buying a property abroad, paying school fees overseas, supporting family in another country, or simply moving savings between currencies — this is a week worth paying attention to.
Here’s a closer look at what’s happening, currency by currency, and what it could mean for you.
Latest market insights:
Pound to euro:
Sterling has softened against the euro over the past week
- With Starmer’s departure now confirmed and a leadership contest ahead, the pound faces a period of uncertainty. Analysts note that Burnham’s preference for higher public spending presents a risk to markets, meaning sterling could remain under pressure until the new leader is confirmed and their economic plans become clearer.
- For property buyers, a 1% move on a €400,000 purchase equals €4,000, money that comes straight off your budget. Locking in a rate in advance with Lumon helps to protect you from rate shifts between having your offer accepted and completing, and means you know exactly what you’ll pay, whatever happens next in Westminster.
US dollar to euro:
The dollar has eased as peace deal optimism lifted markets
- President Trump announced last weekend that the US and Iran had reached an agreement to end the war and open the Strait of Hormuz, with the official signing taking place on 19 June. The news sent oil prices lower, which is good news for inflation across Europe and beyond. With the Strait gradually reopening, energy costs should ease over the coming months, though it will take time for the full benefit to feed through.
Pound to US dollar:
The pound fell to a two-month low against the dollar last week
- Sterling ended last week down more than 1% against the dollar, weighed down by political uncertainty and shifting global risk appetite, despite stronger-than-expected UK retail sales data. The Federal Reserve held US interest rates steady but struck a cautious tone, with a growing number of its policymakers now expecting at least one rate rise this year, keeping the dollar firm.
If you have an international transfer coming up in the next few weeks or months — for a property purchase, a pension payment, supporting family abroad, or any other reason — the events of this week are a useful reminder that exchange rates can move quickly, and not always in the direction you’d hope.
The good news is that you don’t have to simply wait and see what happens. Speaking with a currency specialist costs nothing and carries no obligation. They can talk you through your options — including spot contracts for transfers you need to make now, and forward contracts for transfers you’re planning further ahead — and help you understand how today’s rate movements might affect your specific situation.
Contact Lumon on +44 (0)204 506 5672 for a free, no-obligation conversation and discover what options you have available to help.
