Pound Hits Near One-Month Low as Investors Eye US Rate Hikes and Middle East Tensions

The British pound has hit a near one-month low against the US dollar as investors monitor developments in the Middle East and await potential rate hikes from the Federal Reserve. The GBP/USD pair is currently trading at 1.3283, with oil prices declining due to the suspension of US strikes on Iran.

Despite this easing of inflationary pressures, cautious market sentiment persists, keeping bond yields relatively stable. Attention will soon shift to the Bank of England's decision on Thursday, where interest rates are expected to remain unchanged at 3.75%.

This view is supported by recent inflation data showing consumer price growth slowing to 2.6% in June, a 15-month low and below the Bank's own expectations.