• GBP/USD gains ground to near 1.3430 in Friday’s Asian session.
• Andy Burnham is set to become the next UK Prime Minister on July 20.
• Iranian officials have reported multiple explosions in the country’s south, including near the Bushehr nuclear facility.

The GBP/USD pair gathers strength to around 1.3430 during the Asian trading hours on Friday. The British Pound (GBP) edges higher against the US Dollar (USD) on the UK government leadership transition and growing expectations of further Bank of England (BoE) interest rate hikes.

Andy Burnham’s path to becoming the next UK prime minister looks certain after a vast majority of Labour MPs formally nominated him to be the next party leader. Bloomberg reported on Thursday that 322 of 403 Labour members of Parliament voted for Burnham at the end of the first day of the party’s leadership contest to replace Keir Starmer. Burnham is expected to formally become Prime Minister on July 20.

Traders increased bets on BoE interest rate hikes amid escalating tensions between the US and Iran. Markets are now fully pricing in a 25 basis points (bps) BoE rate hike by year-end, most likely in December, according to Reuters.

Renewed tensions in the Middle East could boost a safe-haven currency such as the Greenback and cap the upside for the major pair. US forces struck several more locations in coastal Iran on Thursday, according to Iranian state media, though the US did not confirm carrying out the attacks. Iranian officials and state media have reported multiple explosions in the country’s south, including near the Bushehr nuclear facility. 

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