GBP/USD remains steady at approximately 1.3450 during the early Asian session on Monday. Trump is pursuing modifications to the US-Iran agreement. BoE’s Bailey indicates there is no urgency to increase interest rates in light of the uncertainties surrounding the Iran war. The GBP/USD pair is currently trading in a stable manner around 1.3450 during the early hours of trading in Asia on Monday. The British Pound stabilises in a sideways consolidation mode following a highly volatile week. Market participants will pay close attention to the unfolding events related to the US-Iran peace agreement and the upcoming release of the US ISM Manufacturing Purchasing Managers Index report later today.
As reported on Sunday that US President Donald Trump has aimed to modify several terms of a proposal to conclude the US-Israel conflict regarding Iran. The modifications pertain to the Strait of Hormuz and the elimination of highly enriched uranium. Meanwhile, Iranian Foreign Minister Abbas Araghchi indicated that discussions and communications with Washington were continuing, but emphasised that no evaluation of the negotiations could be made until a definitive result was achieved. The stagnation in the US-Iran agreements may bolster a safe-haven currency like the US Dollar and pose challenges for the major pair in the short term.
Former Federal Reserve Chair Jerome Powell emphasised that allowing any president to dismiss Fed officials due to policy disagreements could undermine the public trust essential for maintaining a robust and stable economy, according to source. His remarks emerged while the nation’s supreme court is considering the future of Fed Governor Lisa Cook, whom US President Donald Trump has attempted to dismiss due to unverified allegations of mortgage fraud. Markets have adjusted their outlook for a rate hike from the Bank of England in light of softer inflation data, an unexpected increase in the Unemployment Rate to 5.0% for April, and a reduction in political concerns.
BoE governor Andrew Bailey stated on Friday that the UK central bank is not in a hurry to increase interest rates, given the uncertain outcome of the Iran war and the persistently weak growth rate in the UK. “We must closely observe the developments in the Middle East and their implications for the UK economy and inflation, adjusting policy as necessary,” stated Bailey.