GBP Steadies Below 1.3600 as Dollar Strengthens on Fed Caution and Middle East Risks

The British Pound (GBP) has been trading in a narrow range below the mid-1.3600s against the US Dollar (USD), as the greenback strengthens on expectations that the Federal Reserve will keep interest rates higher for longer.

This has led to the dollar's yield advantage over other currencies, making it more attractive to investors and putting downward pressure on GBP/USD.

Escalating tensions in the Middle East have also contributed to the dollar's appeal as investors seek safe-haven assets.

The Bank of England's policy path is still a key factor for the Pound's near-term outlook, with markets anticipating possible rate cuts later this year due to cooling UK inflation.