GBP/USD softens to approximately 1.3425 in the early Asian session on Tuesday. Trump asserts that discussions with Iran are in progress; however, Iran refutes any claims of negotiations occurring. In July, the US ISM Manufacturing PMI increased to 55.6, surpassing expectations. The GBP/USD pair experiences a decline, approaching 1.3425 in the early Asian session on Tuesday. Uncertainty surrounding US-Iran talks drives traders toward a safe-haven currency such as the US Dollar against the British Pound. Attention will be focused on the US jobs data for July, set to be released later on Friday.
US President Donald Trump on Monday asserted that discussions with Iran are continuing, characterising this as Tehran’s “last chance to sign a good document.” Trump indicated that he anticipated negotiations would commence within the next day or two aimed at reopening the Strait of Hormuz, thereby establishing a framework for Iran to respond to the United States’ apprehensions regarding its nuclear program. However, Tehran refuted claims that discussions with the US were occurring. Iran’s Foreign Ministry Spokesperson, Esmaeil Baghaei, indicated that the nation’s present emphasis lies in discussions with Oman regarding the Strait of Hormuz. Furthermore, the positive US economic data lend support to the Greenback and create a headwind for the major pair.
Data released by the Institute for Supply Management on Monday indicated that the US Manufacturing Purchasing Managers’ Index increased to 55.6 in July, a rise from 53.3 in June. This figure exceeded the market expectation of 54.0. Last week, the Bank of England voted 6-3 to maintain the interest rates at 3.75%, with three policymakers advocating for an increase in rates. BoE Governor Andrew Bailey countered anticipations of a forthcoming tightening cycle, asserting that the disinflation process continues to be intact. Markets are currently anticipating only a single rate increase by year-end, as escalating tensions between the US and Iran further complicate the economic landscape.
Analysts highlight that “GBP net shorts bounced higher last week ahead of the BoE policy meeting,” underscoring a build-up in speculative bearish positioning on the Pound. They note that, despite “a more hawkish voting split than the market had expected from the MPC,” Governor Bailey’s “dovish” tone ultimately “suggest[ed] little support for the pound from the BoE,” leaving sentiment towards the currency constrained.