Cooling US inflation data and tentative US-Iran ceasefire talks weigh on the USD, supporting GBP/USD near 1.3450.
GBP/USD trades around 1.3450 in Asian hours, extending modest gains as demand for the USD as a safe haven declines. Reports of a potential 60-day ceasefire extension between the US and Iran, with commitments to clear maritime mines from the Strait of Hormuz, have eased geopolitical tensions.
The USD faced pressure after softer-than-expected US Personal Consumption Expenditures (PCE) data. Headline PCE rose 0.4% month-over-month, while core PCE increased 0.2%, though annual inflation remains above the Federal Reserve’s 2% target at 3.8% and 3.3%, respectively. Market sentiment was further tempered by mixed signals from US officials, including Vice President JD Vance, who indicated a final deal with Iran was not yet secured.
Optimism remains cautious as President Donald Trump has not approved the ceasefire terms, and the US retains a stance to counter Iran’s nuclear program if needed.