GBP\/USD pared some losses after opening with a gap down, but stayed lower near 1.3500 in Asian trading on Monday. The US Dollar found support from safe-haven demand linked to renewed US\u2013Iran tensions.<\/p>\n
The Guardian reported that Iran\u2019s Foreign Ministry spokesman Esmail Baghaei said a US blockade of Iran\u2019s ports and coastline is aggression that violates the ceasefire. He said it amounts to collective punishment, and described it as a war crime and crimes against humanity.<\/p>\n
The pair moved further from a two-month high near 1.3600 reached on Friday. It recovered a few pips from a one-week low set in early Asian trade, and was still down over 0.15% on the day.<\/p>\n
Risk sentiment weakened amid tensions over the Straight of Hormuz. Iran closed the waterway after briefly opening it over the weekend, alongside a US naval blockade of Iranian ports.<\/p>\n
The developments reduced expectations for further peace talks. The current ceasefire is due to end on 22 April.<\/p>\n
We are seeing a familiar pattern as geopolitical risk drives a flight to the safe-haven US Dollar, much like we observed during the Middle East flare-up in April 2025. This move is pressuring GBP\/USD and we should anticipate further strength in the dollar index (DXY), which has already pushed past the 106.00 mark recently. Derivative traders should be positioned for a risk-off environment to persist in the short term.<\/p>\n
The looming April 22 ceasefire deadline is a significant catalyst for a spike in market volatility. During a similar escalation last year, the VIX index, which measures expected market volatility, jumped by nearly 25% in just a few days. Therefore, buying GBP\/USD put options offers a direct way to hedge against a breakdown in talks and a subsequent sharp move lower in the currency pair.<\/p>\n
The closure of the Strait of Hormuz is a critical factor, as nearly 20 million barrels of oil, or about 20% of global consumption, pass through it daily. A sustained blockage could drive Brent crude prices back over $100 per barrel, creating an inflationary shock that complicates the Bank of England’s policy. While this could argue for a hawkish central bank, the immediate safe-haven demand for the dollar is the dominant trading theme.<\/p>\n
We should also monitor the options market, particularly the skew in GBP\/USD risk reversals, which currently show a growing premium for puts over calls. This indicates that market participants are actively buying downside protection against a fall in the pound. This growing bearish sentiment could be exploited by setting up trades like bear call spreads, which would profit if the pair remains below a certain level like 1.3600.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/USD steadied near 1.3500 as safe-haven Dollar demand rose on renewed US\u2013Iran tensions, Hormuz closure.<\/p>\n","protected":false},"author":87,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71],"tags":[],"class_list":["post-45030","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