Pound Weakens Amid Ongoing Middle East Tensions
The British pound has weakened against both the euro and US dollar as investors become cautious about diplomatic efforts to end the Iran war and reopen the Strait of Hormuz. The Middle East tensions flared up again with an attack by Yemen's Houthis on southern Saudi Arabia, which wounded 11 civilians. As a result, Brent crude futures are slightly lower at $82.16 per barrel.
Markets are also awaiting the release of the US nonfarm payrolls data, which is expected to show an increase of 80,000 jobs last month. This could provide clues about the Federal Reserve's interest rate path ahead.
Nick Rees, head of macro research at Monex Europe, believes that once Middle East tensions cool down, attention will shift back to UK fiscal concerns, which are not positive for the pound.