Geopolitical tensions and hawkish Fed minutes keep the dollar supported, capping gains in the pound near 1.3430.
The GBP/USD pair traded flat around 1.3430 in Asian hours, remaining near its weekly high as investors hesitated amid mixed signals on US-Iran talks. Optimism over a potential deal was tempered by President Trump’s warning of further military action if negotiations fail, sustaining geopolitical risks.
Minutes from the Fed’s April meeting showed most policymakers support a 25 basis points rate hike in 2026 if inflation persists above the 2% target. This contrasts with fading expectations for near-term Bank of England tightening, bolstering the USD.
Safe-haven demand for the dollar and Fed policy divergence limited upside for sterling, despite its proximity to recent highs.