Heightened Middle East tensions and rising oil prices lift the USD, pressuring GBP/USD despite an intact technical uptrend.
The GBP/USD pair fell to 1.3445 in early European trading on Friday, extending losses as geopolitical risks bolstered demand for the safe-haven USD. Escalating Middle East tensions, including recent US missile strikes in Iran, and rising global oil prices contributed to the dollar’s strength against the pound.
Markets have priced in over a 90% chance of the Bank of England holding rates at 3.75% in its next meeting, with expectations for a potential hike to 4.0% later this year. Analysts cite moderating UK inflation as a key factor allowing the BoE to maintain its current stance, reinforcing a prolonged pause in tightening.
The Michigan Consumer Sentiment Index, due later Friday, could further influence USD dynamics. Technical analysis suggests the pair’s broader uptrend remains intact despite the short-term dip.