Sterling set for best week against euro since mid-May, ignores politics for now

LONDON, June 26 (Reuters) - Britain's pound was a touch firmer against a broadly softer dollar on Friday and was set to end a week that saw Keir Starmer resign as UK prime minister with its best weekly showing against the euro in over five weeks. 

Sterling rose around 0.2% to $1.3219 as the dollar edged down against all major currencies after a strong performance this week.

It was little changed at around 86.26 pence per euro, having traded at its best levels in almost a year earlier in the week and adding about 0.5% against the euro during the period. 

Analysts say the currency has proved stable in the face of renewed political uncertainty in Britain, which is poised to get its seventh prime minister in 10 years. This is because of signs of a smooth transition in leadership and reassuring signals from Andy Burnham - the only declared candidate to replace Starmer - that UK's fiscal rules will be respected. 

"We are in the kind of environment where markets are open to a change in UK prime minister," said Lloyds currency strategist Nick Kennedy.  

"He (Burnham) doesn't have a defined agenda yet and markets assume he has learnt from his earlier words on bond markets, so sterling is in a good place."

In the last year, Burnham has criticised the government for "being in hock to the bond markets" in comments he has since said have been ​misrepresented. 

(Reporting by Dhara Ranasinghe; Editing by Jonathan Ananda)