GBP/USD at Two-Week Low Amid Escalating Middle East Tensions

The British pound is hovering near its two-week low against the US dollar as risk aversion takes hold amidst escalating Middle East tensions and an energy shock.

Investors are moving away from riskier assets, with the GBP/USD pair attempting to rebound from a low of approximately 1.3485 on Thursday.

Prime Minister Andy Burnham reaffirmed the government's commitment to fiscal discipline in his address to the House of Commons, but the market is waiting for Chancellor John Healy's first major statement on the government's programme, expected as early as next week.

The Bank of England's expectations of a 25-basis-point rate hike before year-end continue to support the pound, despite rising inflation and hawkish signals from the Federal Reserve.