Geopolitical risks and Fed rate hike speculation weigh on the Pound as crude prices surge over 7% amid US-Iran conflict.
The British Pound holds below 1.3300 against the US Dollar as escalating US-Iran tensions dominate market sentiment. GBP/USD remains nearly unchanged despite President Trump’s warning of further strikes on Iran, which sent crude prices rallying over 7.8% to $85 per barrel.
Traders are also monitoring central bank decisions, with the Federal Reserve and Bank of England yet to signal their next moves. US inflation cooled in June, but resilient jobs data keeps a 25-basis-point rate hike in play, with odds rising to 41%. Fed Chair Kevin Warsh’s potential influence on delaying hikes adds uncertainty.
The surge in oil prices may pressure the Fed to tighten policy further, though market reactions remain cautious amid thin economic data.