The Pound Sterling drops by over 0.40% against the Greenback as risk aversion weighs on most G8 currencies amid the escalation of the Middle East conflict and growing speculation of an extended US campaign against Iran.
The GBP/USD trades at 1.3313 after reaching a daily high at 1.3393
GBP/USD falls as Middle East escalation revives Fed hike bets The Gulf War continues to drive price action, bolstering the American currency. The US Dollar Index (DXY), which tracks the buck against its peers, edges up 0.32% to 101.46. Tensions in the Middle East are rising sharply as N12 reports that US President Donald Trump said that he is “considering a massive attack greater than anything before, I’m close to making a decision.” This exerts additional pressure on the GBP/USD, which approaches the 1,3300 figure.
In the meantime, Houthi sources said that Atamco Oil facilities would be a target if the blockade of Yemen is not lifted, reported Al Jazeera. Aside from this, US economic data revealed that the labour market remains solid, as the US Department of Labour revealed that Initial Jobless Claims for the week ending July 18 came at 187K, stronger than the expected 212K by analysts. Money markets increased the chances of a Federal Reserve rate hike at the July 20 meeting.