British Pound holds steady above 1.3450 as Iran hopes and Fed repricing weigh on USD

The British Pound (GBP) remained steady above 1.3450 during the Asian session on Thursday, as traders awaited developments from the Middle East crisis. Iran and Oman were reportedly nearing an agreement for commercial shipping through the Strait of Hormuz, which could potentially boost the GBP/USD pair. Additionally, hopes for a peace deal between the US and Iran kept the safe-haven USD depressed near a seven-week low, providing support for the GBP.

Meanwhile, oil prices hovered near a three-week low due to optimism over a diplomatic resolution to the US-Iran conflict and the possibility of reopening the Strait of Hormuz. This eased inflation concerns and reduced expectations for a rate hike by the US Federal Reserve (Fed), further benefiting the GBP.

The GBP's recent rise and bullish trend oscillators suggested potential upside, while technical indicators remained neutral to mildly positive. However, geopolitical risks, such as the Houthi attacks on Saudi oil tankers, kept the USD from losing more value and limited the GBP's upside. Traders were also cautious ahead of the US Nonfarm Payrolls (NFP) report on Friday and the UK Construction PMI and Weekly Initial Jobless Claims data.

The Pound Sterling is the world's oldest currency (886 AD) and the fourth most traded unit in foreign exchange, accounting for 12% of transactions, averaging $630 billion daily. Its value is primarily influenced by the Bank of England's monetary policy decisions aimed at achieving price stability (around 2% inflation). Factors such as GDP, PMIs, and employment figures can impact the Pound's value, with a strong economy generally supporting the GBP and a weak economy potentially weakening it.