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GBP/USD steadies near 1.3400 as US-Iran tensions ease

BNY says UK assets will be driven more by the incoming chancellor choice than by leadership change alone, as markets prioritize fiscal sustainability.

Reported · Written up by our desk · Major Pairs

The British pound held its recovery in early trading, with GBP/USD steady near 1.3400 and support around 1.3370 as the US dollar lost some haven demand after US-Iran tensions eased, according to FXStreet.

FXStreet notes that the dollar softened on receding Middle East concerns after Iran confirmed mediation efforts with the US, while traders also remained focused on ongoing developments and central bank communication.

BNY strategist Geoff Yu, as cited by FXStreet, argued that UK assets, including the pound and gilts, are likely to react more to who is selected as chancellor under incoming Prime Minister Andy Burnham than to the leadership change itself, with markets concentrating on fiscal sustainability.

FXStreet also reported GBP/USD is being supported by the domestic demand for real gilt yields, even as foreign interest appears more limited.

Latest closeGBP/USD 1.340 ▲0.0%

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