British Pound declines to near 1.3500 as US-Iran tensions rise
The GBP/USD pair declines to near 1.3500 during the early European trading hours on Wednesday. Ongoing tensions in the Middle East provide some support to a safe-haven currency such as the US Dollar (USD) against the British Pound (GBP).
The British Pound (GBP) experienced a decline, reaching near 1.3500, amid heightened tensions between the United States and Iran. The US Dollar (USD), serving as a safe-haven currency, supported the GBP during this period. Market observers will closely monitor the upcoming US August jobs report on Friday. Recent reports mentioned a new round of attacks between the US and Iran, with American forces striking Iranian targets and Tehran retaliating against US interests.
US President Donald Trump stated that the strikes were in response to Iran's activities, warning of further retaliation if Tehran responded. The Bank of England (BoE) Governor Andrew Bailey downplayed the risk of inflation, stating that the UK is not yet experiencing significant second-round effects. Analysts at UOB Group maintain a cautious outlook for GBP, with a potential decline towards the 1.3480 level if the Pound remains below 1.3600.
The GBP/USD pair holds a slight bullish bias but remains below the 100-day simple moving average and the lower Bollinger Band, indicating a neutral-to-slightly consolidative market stance.
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