GBP Holds Firm as Iran Peace Hopes and Fed Rate Hike Loom

The British Pound is holding steady above 1.3450 as investors weigh the implications of Iran's hopes for a peace deal and the US Federal Reserve's potential rate hike.

Iran's Foreign Ministry spokesperson Esmaeil Baghaei stated that the country and Oman are close to finalizing a framework for commercial shipping through the Strait of Hormuz, which is adding to the pressure on the safe-haven US Dollar. The optimism surrounding a diplomatic resolution to end the US-Iran war has kept crude oil prices near a three-week low.

This has eased inflation fears and tempered expectations for a rate hike by the Fed, both of which are contributing to the Pound's appreciation against the USD. Strategists at Scotiabank's Global FX Strategy team note that the Pound remains underpinned due to its solid rise last week and bullish trend oscillators.