Sterling fell against major peers, down 0.25% to about 1.3425 versus the US Dollar in European trading on Monday. The move followed stalled US\u2013Iran talks on a permanent ceasefire, which reduced risk appetite.<\/p>\n
S&P 500 futures fell during European trade, while the US Dollar Index rose 0.3% to near 99.00. The shift supported the Dollar and weighed on the Pound.<\/p>\n
US\u2013Iran negotiations did not progress over the weekend after Tehran refused to drop ambitions to build nuclear weapons. The US said it will start blockading vessels entering and leaving Iranian ports on April 13 at 10:00 AM ET (14:00 GMT).<\/p>\n
Middle East tensions lifted oil prices, which can pressure currencies of net oil importers such as the UK. Higher energy costs can raise import bills and affect demand for the Pound.<\/p>\n
In the UK, markets will watch Bank of England Governor Andrew Bailey\u2019s speech on Tuesday for policy signals. February GDP data is due on Thursday, with growth seen at 0.1% after 0.0% in January, alongside Manufacturing and Industrial Production figures.<\/p>\n
In the US, firmer oil prices are leading traders to price in a more hawkish Federal Reserve stance. This has also pushed inflation expectations higher.<\/p>\n
We remember this time last year, in April 2025, when the failure of US-Iran talks sent a shock through the markets. The resulting spike in oil prices immediately put pressure on the Pound, a familiar pattern for the energy-importing UK economy. That event serves as a critical reminder of how quickly geopolitical risk can impact currency markets.<\/p>\n
Today, a similar risk-off sentiment is taking hold, with the US Dollar Index again climbing, currently trading near 105.50. This renewed demand for the dollar as a safe haven reflects ongoing global uncertainties, squeezing liquidity from assets like equities. As we saw in 2025, a strong dollar often correlates with weakness in currencies like Sterling.<\/p>\n
Mirroring the situation last year, tensions in the Middle East are once again pushing oil prices higher, with Brent crude futures hovering around $90 per barrel. These supply-side fears are compounded by recent OPEC+ decisions to maintain production cuts. For the UK, this means higher import costs and persistent inflationary pressures.<\/p>\n
Domestically, we are closely watching for the Bank of England’s next move, especially with UK inflation remaining stubbornly high, last reported at 3.2% year-over-year. While recent GDP figures showed modest 0.1% growth, the Bank is caught between fighting inflation and avoiding a recession. Upcoming statements will be critical for gauging their tolerance for continued price pressures.<\/p>\n
In the US, last week’s Consumer Price Index (CPI) came in hotter than expected at 3.5%, complicating the Federal Reserve’s path forward. This has traders pushing back expectations for interest rate cuts, strengthening the case for a hawkish Fed. This divergence in monetary policy could further widen the interest rate differential in favor of the dollar over the pound.<\/p>\n
Given these parallels to the 2025 scenario, traders should consider positioning for potential further weakness in the GBP\/USD pair. Options strategies, such as buying puts on Sterling or selling out-of-the-money calls, could offer a defined-risk way to hedge or speculate on a move lower. Volatility in the energy sector also suggests looking at derivatives tied to oil prices to manage exposure to that key driver.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Pound slipped as stalled US\u2013Iran ceasefire talks boosted dollar, oil, and hawkish Fed bets in markets.<\/p>\n","protected":false},"author":87,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-50778","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t