GBP/USD Rangebound as US-Iran Peace Hopes Fail to Inspire Sterling

The Pound US Dollar (GBP/USD) exchange rate struggled to establish a clear trend on Monday, as uncertainty surrounding developments in the Middle East kept the currency pair unsettled. The USD was trading at $1.3498, with the pair fluctuating since the start of the week.

The US-Iran peace negotiations were a major factor influencing market sentiment. President Donald Trump said the US was 'semi-negotiating' with Iran, while Tehran has reportedly sought compensation from Washington for damage caused by the war. Iran is also in talks with Oman over a partial reopening of the Strait of Hormuz.

The safe-haven USD moved unevenly as market sentiment shifted. The Pound (GBP) lacked a clear direction, with a quiet UK economic calendar leaving Sterling to take its cues from developments in the Middle East.

Looking ahead, the GBP/USD exchange rate could remain sensitive to shifts in global risk appetite on Tuesday, with neither the UK nor US economic calendars offering much in the way of market-moving data. Evidence of progress towards a US-Iran agreement could lift risk appetite and reduce demand for the safe-haven USD.