GBP/USD Price Forecast: Seems poised to climb further as USD weakens on US-Iran optimism
The GBP/USD pair is seen building on the previous day’s strong move up of around 125-pips and gaining some follow-through traction on Tuesday. This marks the seventh straight day of a positive move and lifts spot prices to the 1.3535-1.3540 region, or the highest since February 26, during the first half of the European session. Despite failed US-Iran peace talks over the weekend, investors continue to move towards riskier assets amid hopes that the door for diplomacy remains open and that negotiations would continue. This, in turn, undermines the safe-haven US Dollar (USD) and acts as a tailwind for the currency pair.
US Vice President JD Vance struck a cautiously optimistic tone on negotiations with Iran and suggested during an interview on Fox News that meaningful progress has been made even as talks have yet to deliver a breakthrough. Vance further added that the framework for a comprehensive agreement is achievable if Iran is willing to take the next step. Moreover, Reuters reported that negotiating teams from the US and Iran could return to Islamabad for another round of peace talks this week. The optimism, along with the uncertainty over future interest rate moves by the US Federal Reserve (Fed), drag the USD to its lowest level since early March and remains supportive of the bid tone surrounding the GBP/USD pair. Read more…
GBP/USD finds support: Geopolitics already priced in, focus on Bank of England
GBP/USD rose to 1.3506 on Tuesday. Sterling has moved comfortably away from last week’s one-month high of 1.3480. Pressure on the currency had previously increased following the collapse of US-Iran talks over the weekend.
The breakdown in dialogue followed Tehran’s refusal to abandon its nuclear program and disagreements over the terms of the agreement, which the Iranian side described as excessive. Against this backdrop, Donald Trump threatened to block the Strait of Hormuz, a critical oil supply route. This pushed Brent crude prices to 102.00 USD per barrel. Read more…
