The GBP/USD pair shows slight increases around 1.3580 in the Asian trading session on Monday. However, the possible gains for the major pair could be constrained due to the prevailing uncertainty in the Middle East. The employment report for the United States in April is set to be the focal point later on Friday.
Markets may exhibit caution following statements from US President Donald Trump regarding the initiation of efforts on Monday morning to assist ships stranded in the Strait of Hormuz, described as a “humanitarian gesture” aimed at supporting neutral nations amid the US-Israeli conflict with Iran. An Iranian official cautioned that any US interference in Hormuz would be deemed a breach of the ceasefire, emphasizing that the Strait of Hormuz and the Persian Gulf are not venues for rhetoric.
GBP/USD moves upward to approximately 1.3580 during the early hours of Monday’s Asian session. Market participants will pay close attention to the evolving situation in the Middle East. At the April policy meeting last week, both the BoE and the Fed decided to keep interest rates steady. Iran previously asserted that the United States responded to its 14-point plan via Pakistan, indicating that it was assessing the reply, although Trump remarked that it was improbable to be deemed acceptable. Indicators of escalating tensions in the Middle East may strengthen a safe-haven currency like the US Dollar, potentially posing challenges for the major pair.
In the previous week, the Bank of England and the US Federal Reserve decided to keep interest rates unchanged. BoE Governor Andrew Bailey indicated that should the price pressures resulting from the conflict become significant, a “forceful tightening” would be necessary. Bailey addressed concerns regarding imminent rate increases, stating that “we’ll continue to monitor the situation and its impact on the UK economy very closely.”