The British Pound rises to a three-week high as the US Dollar weakens after Fed minutes and optimism over US-Iran negotiations.
The British Pound (GBP) extended gains against the US Dollar (USD) for a second day, breaching 1.3400 to reach its highest level in three weeks. The move follows a pullback in the Greenback after the Federal Reserve’s June meeting minutes revealed divisions among policymakers over the timing of future interest rate hikes, despite a unified stance on combating inflation.
Markets also reacted to reports of potential US-Iran negotiations, with President Donald Trump suggesting Tehran is eager to resume talks. While geopolitical tensions persisted, risk sentiment remained stable, supporting the Pound’s advance. In the UK, political stability contributed to the currency’s strength, as leadership candidate Andrew Burnham pledged adherence to fiscal rules set by Chancellor Rachel Reeves.
The Pound’s rally comes amid a quiet week for UK economic data, leaving investors focused on external factors driving USD weakness. The Fed’s cautious tone and geopolitical developments overshadowed domestic concerns, keeping GBP/USD elevated.