GBP/USD depreciates on increased risk aversion

Pound Sterling weakens as safe-haven demand lifts US Dollar

GBP/USD pares its recent gains from the previous day, trading around 1.3220 during the Asian hours on Tuesday. The pair depreciates as the US Dollar (USD) gains ground amid increased risk aversion, which could be attributed to the Middle East peace truce uncertainty.

US President Donald Trump said on Monday that the latest proposal for a US ceasefire with Iran is “not good enough” ahead of his deadline for Iran to either reopen the Strait of Hormuz. “It’s not good enough, but it’s a very significant step,” Trump said, adding, “They’re negotiating now, and they’ve made a very significant step. We’ll see what happens.” Read more…

GBP/USD steady above 1.32 after ISM miss weighs on the US Dollar

GBP/USD traded flat on Monday, settling close to 1.3240 in a thin session with the UK on Easter Monday holiday. The pair bounced modestly from last week’s low near 1.3180, which marked the weakest level since mid-March, but the recovery has so far been shallow. Price remains in a broader downtrend from the late January high around 1.3870, with sellers capping rallies toward the 1.3300 area in recent sessions.

On the Pound Sterling side, the Bank of England (BoE) voted unanimously to hold the Bank Rate at 3.75% at its March meeting, a notable shift from the narrow 5 to 4 split in February. Members who had previously supported cuts, including Sarah Breeden and Swati Dhingra, moved to a hold in response to rising energy costs tied to the Middle East conflict. The BoE warned that Consumer Price Index (CPI) inflation is likely to climb to between 3% and 3.5% over the coming quarters, while Gross Domestic Product (GDP) growth remains stalled and unemployment has risen to a 10-year high of 5.2%. Tuesday’s S&P Global Services Purchasing Managers Index (PMI) for March, with a consensus of 51.2, is the next key release for the Pound. Read more…

GBP/USD climbs above 1.3240 as Iran hopes dent US Dollar

The British Pound (GBP) advances by over 0.40% on Monday as US President Donald Trump said the Tuesday deadline he has set for Iran to make a deal is final, while rumors of a possible de-escalation weighed on the US Dollar (USD). GBP/USD trades around the 1.3240 figure at the time of writing.

Risk appetite improved on Monday after Axios reported that US and Israeli officials, along with regional mediators, are discussing a 45-day ceasefire that could be extended if needed. Investors cheered the news, as depicted by US equities posting gains of 0.15% to 0.52%. Read more…