The British pound pares early advances against the dollar as geopolitical risks boost demand for the greenback amid escalating US-Iran conflict.
The GBP/USD pair retreated to around 1.3410 in European trading Friday, surrendering earlier gains as the US dollar rebounded. Rising tensions between the US and Iran, including recent military strikes, fueled safe-haven demand for the greenback.
The US Dollar Index (DXY) recovered to near 100.85 after hitting a three-week low of 100.60 earlier in the session. Despite the rebound, the DXY remains 0.1% lower than Thursday’s close. The yen outperformed other major currencies, with the dollar weakening against the Japanese currency.
Iranian state media reported additional US strikes on coastal locations late Thursday, while US officials confirmed ongoing technical talks with Tehran despite the conflict. Markets remain cautious as geopolitical risks persist.