LONDON, July 8 Reuters The pound traded at a threeweek high against the euro on Monday, after Sunday39;s election in France looked likely to result in a hung parliament that raises the risk of political gridlock in the euro zone39;s secondlargest economy.

In the UK, new Finance Minister Rachel Reeves will pledge on Monday to take difficult decisions to drive economic growth, including swift changes to unblock infrastructure and private investment, in her first major speech since Labour won power last week, according to excerpts released by her Treasury department.

Since Labour39;s landslide win on Thursday, the pound has strengthened by 0.5 against the euro , leaving the single European currency at 84.54, its lowest since June 14 on Monday.

We doubt that fiscal prospects will have an impact on the pound just yet, while developments in French politics, US macro and Bank of England rate expectations will remain the largest sterling drivers, ING strategist Francesco Pesole said.

The pound gained 0.4 against the dollar on Friday, after the monthly nonfarm payrolls report showed the U.S. economy generated jobs at a healthy rate in June. But signs of weakness are starting to emerge, which investors took as a sign the Federal Reserve will be more likely to cut rates sooner rather than later.

Sterling , which is bestperforming major currency against dollar this year, was flat at 1.2809.

The Bank of England meets on Aug 1. Right now, markets are attaching a roughly 63…