Sterling 'outperformance' continues as labour leadership transition unfolds

Matthew Ryan, CFA Ebury

In a quiet week, market focus was on the likely successor to Keir Starmer as prime minister, Andy Burnham.

Sterling was buoyed by his insistence that he intends to maintain the fiscal rules and reports that his advisors are not seeking additional taxation, though it remains unclear how he intends to fund his social and infrastructure spending priorities.

Ed Miliband is now the clear favourite to be named the new chancellor. While his preference for fiscal expansion is a red flag for UK assets, the limited headroom means that realistically the hands will be tied for any occupant of Number 11.

Bank of England Governor Bailey sounded a dovish note at the Sintra central bankers conference, which helped push market expectations of the first hike all the way to 2027. We have been saying for months that market pricing for higher UK rates was excessive, and this merely cements this view.

Sterling outperformance relative to the euro continues and the pound has broken the tight range that it held in this pair throughout 2026.

Author

Matthew Ryan, CFA

Ebury

Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.

GBP/USD: Daily gains remain capped by 1.3650

GBP/USD leaves behind Monday’s pessimism and advances marginally on Tuesday. Cable’s humble gains, however, appear to have met quite a decent resistance in the 1.3650 zone for now, in a context of a slight selling pressure hovering around the Greenback.

EUR/USD picks some pace, retests 1.1670

EUR/USD advances modestly and revisits the 1.670 zone on turnaround Tuesday. The pair’s slight advance comes after two daily drops in a row and follows the humble decline in the US Dollar, while investors gear up for upcoming US data and the Jackson Hole Symposium.

Gold treads water around $4,650

Gold navigates the middle of its daily range near $4,650 per troy ounce on Tuesday. The lack of clear direction in the yellow metal comes on the back of the widespread cautious tone among market participants, a mildly offered stance in the US Dollar and a marked decline in US Treasury yields across the curve.

Crypto Today: Bitcoin soars past $80K as Ethereum and XRP hold gains

Bitcoin (BTC) is trading above $80,000 on Tuesday. This is the highest level the Crypto King has traded since mid-May, underscoring a positive shift in investors' risk-on sentiment, liquidity conditions and the technical outlook.

Nvidia earnings: A quick look at expectations

The 2026 Q2 earnings season is nearly over for S&P 500 members, with the reporting cycle notably positive. But looming large this week is none other than AI-favorite NVIDIA (NVDA) , whose results will wrap up the reporting cycle for the Magnificent Seven group as well.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.