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Pound slides below 1.3450 as US-Iran uncertainty lifts USD safe-haven demand
GBP/USD traded near 1.3425 after Trump said US-Iran talks are ongoing, while Iran denied talks and cited discussions with Oman on the Strait of Hormuz.
FXStreet reports GBP/USD fell to the 1.3425 area in early Asian trading on Tuesday, with the pound weakening below 1.3450 as uncertainty around US-Iran talks boosted demand for the US dollar as a safe haven.
The outlet notes that markets were also looking ahead to US July jobs data due later on Friday, while upbeat US economic releases supported the greenback. The ISM reported US manufacturing PMI rose to 55.6 in July, up from 53.3 in June, beating expectations for 54.0.
On the political front, FXStreet says President Donald Trump claimed on Monday that talks with Iran were ongoing and described Tehran’s position as its last chance to sign a deal, including a possible timeline to reopen the Strait of Hormuz. Iran’s foreign ministry spokesperson, Esmaeil Baghaei, denied US talks were taking place and said the country’s current focus was negotiations with Oman over the strait.
FXStreet also points to recent Bank of England action, saying the BoE voted 6-3 to hold rates at 3.75% with some favoring a hike, and that Bailey said the disinflation process remains intact. The report adds that markets are pricing only one BoE rate hike by year end, while analysts at Rabobank said GBP net shorts increased ahead of the BoE meeting and Bailey’s tone was broadly dovish for the pound.
Latest closeGBP/USD 1.343 ▼0.2%