The Pound Sterling (GBP) falls to near 1.3370 against the US Dollar (USD) during European trading hours. This weakness is due to an increased demand for US Dollars as tensions between the United States and Iran escalate. The US Dollar Index (DXY) hits a three-week high around 99.40, driven by safe-haven demand. Iran has threatened retaliation after the US attacked Tehran’s nuclear facilities, heightening geopolitical risks.

Impact Of Geopolitical Tensions

US President Donald Trump claimed the destruction of Iranian sites, although reports suggest Iran shifted its uranium stockpiles before the attack. Iran may close the Strait of Hormuz, potentially affecting global oil supply. The UK sees better-than-expected S&P Global Purchasing Managers’ Index (PMI) data, with the Composite PMI at 50.7. Despite this, GBP underperforms against the USD but still outperforms other currencies. The Bank of England maintains a gradual monetary easing stance, keeping rates at 4.25%. Fed Governor Christopher Waller supports a potential interest rate cut, noting limited tariff impacts on inflation. The GBP/USD pair remains bearish, staying below the 20-day EMA at 1.3477. Key support is seen at 1.3250, with resistance at 1.3630. The USD benefits from positive PMI data, indicating expansion in the private economy. The Pound’s latest move beneath 1.3370 signals a clear shift in trader appetite, largely skewed towards seeking safety. In this case, it’s the US Dollar drawing fresh attention. That jump in the Dollar—shown by the DXY climbing to 99.40—isn’t just a technical move; it’s fueled by rising anxiety in markets tied back to events in the Middle East. Waller’s mention of a rate cut puts a different kind of energy into Dollar dynamics. Although the US economy has brushed off higher tariffs with barely a flinch, the idea of more flexible monetary policy sits warmly with equity markets.

Oil Supply And Market Volatility

Looking at price action, the 20-day EMA still acts like a ceiling for bulls, not a floor. Until Sterling moves convincingly above that 1.3477 threshold—and holds there for more than a single session—upside positioning could keep taking on water. The 1.3250 zone below needs to be monitored closely, not only as a technical reference but as a broader threshold. A break beneath that, especially on volume, would probably trigger further hedge flows into Dollar-length instruments. For now, energy markets are the wild card. With Iran hinting at closing the Strait of Hormuz, any tangible interference in oil supply chains could sharpen volatility in both commodities and currencies. That wouldn’t be confined to WTI and Brent; we expect secondary demand for dollars to rise, not from traders chasing yield, but from institutions needing collateral and global firms hedging import strains. In the derivatives space, strategy will need to stay agile. While implied volatilities haven’t blown out yet across currency contracts, directional bias has started consolidating. The bearish skew on GBP/USD options has widened slightly, and we’ll likely see higher short gamma interest if support levels start to wobble. Calendar spreads with nearer-term maturities may offer visibility and manageable exposure, especially with event risk lined up over the next fortnight. สร้างบัญชี VT Markets ของคุณ และ เริ่มการซื้อขาย ตอนนี้.

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