GBP Weakens Despite Hopes of US-Iran Deal Amid Conflicting Rhetoric
The British Pound (GBP) is experiencing weakness despite hopes of a US-Iran deal, which would normally be seen as positive for the GBP/USD pair. The conflicting rhetoric from US officials about a potential agreement has fueled market concerns and dragged the GBP lower against the USD.
US President Donald Trump said on Wednesday that he had 'very productive talks with Iran', but US Vice President JD Vance stated that deal negotiations with Iran would 'be messy' and take time, saying that 'the Iranians are extraordinarily difficult people' with 'a fractured system'. Meanwhile, Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed that negotiations between Iran and Oman on reopening the Strait of Hormuz have continued for more than three weeks and produced broad agreement on proposed inbound and outbound shipping routes.
The ADP data released on Wednesday showed a weaker-than-expected US employment figure, with an increase of 44K in July compared to a rise of 98K in June. The upcoming US employment data for July will take center stage later this week, and any signs of weakening in the US labor market could prompt traders to push back their bets on Fed rate hikes and undermine the USD.