GBP Dives on Iran De-Escalation Hopes Amid USD Strength
The British Pound (GBP) fell by over 0.17% against the US Dollar (USD) on Tuesday, as news emerged that Tehran intends to reopen the Strait of Hormuz if the United States meets certain conditions.
According to reports, Iran told Washington it would open the Strait of Hormuz in seven days if the US lifts its blockade on Iran and halts military operations. However, sentiment remains upbeat due to growing speculation that the Federal Reserve (Fed) will raise interest rates before year-end, underpinning the Greenback's strength.
The US Dollar Index (DXY), which measures the performance of the American currency against six others, rose by 0.27% to 100.69, a two-month high. Meanwhile, data showed that the ADP Employment Change 4-week average increased from 16.75K to 20K, indicating strength in the labor market.
Inflation concerns were also highlighted by Boston Fed Susan Collins, who stated that she supported a rate hike last week because inflation could become entrenched above 2%. US President Donald Trump reiterated that Iran cannot have a nuclear weapon and expressed optimism about a potential deal between the US and Iran after the US midterm election in November.