The British Pound rebounds against the US Dollar as easing US-Iran tensions reduce Fed rate hike bets, though UK inflation data looms.
The GBP/USD pair rose in early Asian trading Wednesday, halting a four-day slide after hitting a one-week low near 1.3360. The recovery lacks strong momentum, with the pair trading below 1.3400 amid cautious sentiment.
The US Dollar’s pullback follows a four-day rally to a one-week high, driven by hopes that US-Iran diplomacy could ease energy prices and temper Federal Reserve rate hike expectations. However, geopolitical risks persist, including tensions over the Strait of Hormuz and a Houthi naval blockade, which pushed crude oil to a near-month high.
Investors remain hesitant ahead of UK consumer inflation data, seeking clues on the Bank of England’s next policy move. The release may influence the GBP’s near-term trajectory as markets assess fiscal policy under new Prime Minister Andy Burnham.