GBP Surges Past 1.33 on Dollar Weakness and Iran Hopes

The Pound Sterling (GBP) continued its rally against the US Dollar (USD), extending its gains for a second consecutive session. The GBP/USD pair rose above the mid-1.3300 area, supported by broad-based USD softness.

The improved tone around Sterling came as traders added to long positions in GBP/USD, taking advantage of the weaker Greenback and unwinding safe-haven flows. Market participants showed caution ahead of this week's two-day Federal Open Market Committee (FOMC) meeting, limiting aggressive positioning in USD.

The US Dollar Index (DXY), which measures the currency against a basket of peers, retreated from its monthly high after renewed optimism emerged for a diplomatic solution to end the US-Iran conflict. The apparent easing of tensions prompted investors to scale back the geopolitical risk premium, undermining demand for the safe-haven USD.