The pound-euro (GBP/EUR) is falling on Friday and is set to fall throughout the week.
The pound is under pressure as political uncertainty rises, with Keir Starmer facing scrutiny over the appointment of Peter Mandelson. Markets are concerned about a potential left-leaning replacement.
The euro edges higher as oil prices fall sharply on growing optimism over US–Iran diplomacy and a ceasefire between Israel and Lebanon.
Despite easing energy costs, the eurozone remains vulnerable to external shocks, as earlier oil price spikes have already lifted inflation, underscoring ongoing risks to the region’s economic outlook.