Home›Forex›Major Pairs›Dollar rallies as Strait of Hormuz toll plan and Fed h…

Dollar rallies as Strait of Hormuz toll plan and Fed hawkishness hit GBP/USD

GBP/USD slid to 1.3349 after Washington moved to reinstate its Hormuz blockade and a Fed governor warned the next policy step could be a rate hike.

Reported · Written up by our desk · Major Pairs

British pound sterling weakened against the US dollar Monday, with GBP/USD slipping below its 200-day EMA and changing hands around 1.3349, after probing the 1.3400 area earlier in the Asian session.

FXStreet linked the broad dollar strength to two fast-moving developments, including a policy shift that turns the Strait of Hormuz into a paid passage route and a fresh signal from the Federal Reserve suggesting the next move may be toward higher rates.

President Trump announced Washington will reinstate its blockade of Iran and reopen the Strait of Hormuz as a toll corridor, barring Iranian vessels and any ship trading with Tehran while other ships face a 20% transit fee collected by the waterway's guardian. The article said the plan follows renewed American strikes on Iran and Tehran attacks on commercial shipping that ended the previous ceasefire.

In parallel, FXStreet reported that a Federal Reserve governor, previously viewed as a dove, warned in a New York speech that policy sits at a crossroads and that Tuesday's inflation report could determine whether rates need to rise. The piece said rate futures have repriced with a more than even chance of a quarter-point hike by the September meeting and about three-in-four odds that the target range is above the current 3.50% to 3.75% by then.

Latest closeGBP/USD 1.335 ▼0.5%

More like this

Sources