The Pound Sterling retreats during the North American session, down 0.22% against the Greenback, as geopolitical tensions remained high, triggering a jump in Oil prices and heightening fears of a reacceleration of inflation.
The GBP/USD trades at 1.3449 after peaking near 1.3480
GBP/USD eases as Middle East tensions lift Dollar demand Hostilities in the Middle East continued with the US attacking Iranian infrastructure, according to Iran’s army spokesperson, who warned that attacks on Oil facilities could trigger retaliation, saying that “either all countries in the region can export oil or no one can.” As tensions rose, Oil prices jumped, with WTI, the US crude Oil benchmark, gaining over 1.50% to $80.78 per barrel. US economic data revealed that Consumer Sentiment improved due to the dip in gasoline prices at the pump, according to the University of Michigan (UoM): The survey revealed that the index rose from 50.7 to 54 in July. Meanwhile, inflation expectations for one year dipped from 4.6% in June to 4.2%, and for five years, were steady at 3.3%.
Meanwhile, expectations that the Federal Reserve (Fed) would tighten monetary policy had tempered, following US inflation data on the consumer and producer side. Both readings showed a modest cooldown, but Iran’s war escalation has kept WTI up 13% so far this month. Money markets had priced in a nearly 61% chance of a Fed rate hike at the October 28 meeting, according to Prime Terminal data.