The British pound climbs against the dollar as optimism over a US-Iran peace agreement boosts risk sentiment ahead of key economic data.
The GBP/USD pair advanced to 1.3430 in early Asian trading on Wednesday, supported by expectations of a US-Iran peace deal set to be signed Friday. The agreement could reopen the Strait of Hormuz and allow Iran to resume oil sales, lifting market sentiment.
Markets remain cautious ahead of the UK Consumer Price Index (CPI) inflation data and the US Federal Reserve’s interest rate decision later in the day. The Fed is widely anticipated to hold rates steady at 3.5%-3.75%, with focus on Fed Chair Kevin Warsh’s press conference.
The Bank of England is also expected to keep rates unchanged at 3.75% on Thursday, as policymakers assess inflation risks from higher energy prices linked to the Iran conflict.