The pair remains range-bound below mid-1.3600s as the USD recovers on Fed rate hike bets and Middle East tensions.
The GBP/USD pair traded sideways near 1.3630 during Tuesday’s Asian session, extending its consolidative move for a second day. A modest rebound in the USD, driven by expectations of further Federal Reserve tightening and geopolitical risks, weighed on the pair.
Markets now price in over a 75% chance of at least one more Fed rate hike by year-end, despite softer July inflation data. Escalating US-Iran tensions, including threats to disrupt oil exports via the Strait of Hormuz, also supported the safe-haven USD.
Traders remain cautious, awaiting clearer signals on the Fed’s policy path before committing to aggressive positions. The focus stays on upcoming economic data and Fed commentary.