The British pound climbs against the dollar as risk aversion eases following a partial ceasefire between Israel and Hezbollah.
GBP/USD advanced to 1.3470 in European trading on Tuesday, recovering from minor losses the prior day. The move follows a decline in the US dollar amid reduced risk aversion after Israel agreed to halt troop movements near Beirut and Hezbollah pledged to avoid attacks on Israel.
The pair had faced pressure earlier in the week due to escalating geopolitical tensions in the Middle East. However, US President Donald Trump’s announcement of a partial de-escalation provided temporary relief, though broader uncertainties persist. Iran’s suspension of indirect talks with the US and threats to block key shipping routes add to lingering risks.
Markets remain cautious as geopolitical risks could reverse the dollar’s weakness. The Strait of Hormuz, a critical chokepoint for global energy supplies, remains effectively shut, heightening concerns over oil and LNG shipments.