Geopolitical risks in the Middle East lift the USD, pressuring GBP/USD ahead of US consumer sentiment data.
GBP/USD declined for a second day, trading near 1.3460 in Asian hours as the USD strengthened on safe-haven demand. Escalating Middle East tensions, including reports of Iran directing Houthi militants to disrupt Red Sea oil routes, fueled risk aversion.
Cooling US inflation and producer price data reduced expectations for a near-term Fed rate hike, though markets remain split on a September move. Bank of England Governor Andrew Bailey acknowledged geopolitical risks but noted no material impact on UK inflation yet.
The USD’s advance was tempered by softer economic data, with June consumer inflation rising less than forecast and producer prices unexpectedly falling.