Pound Weakens as Trump's Iran Claims Spark Safe-Haven US Dollar Surge
The British Pound (GBP) weakened to near 1.3425 against the US Dollar (USD) during early Asian trading hours on Tuesday due to uncertainty surrounding US-Iran talks, which drove traders towards a safe-haven currency.
US President Donald Trump claimed that talks with Iran are ongoing, but Tehran denied this, stating that their focus is on negotiations with Oman over the Strait of Hormuz.
The upbeat US economic data also provided support to the Greenback and created headwinds for the major pair. The Institute for Supply Management (ISM) reported a stronger-than-expected Manufacturing Purchasing Managers' Index (PMI) of 55.6 in July, up from 53.3 in June.
The Bank of England (BoE) maintained its interest rates steady at 3.75%, with three policymakers favoring a rate hike. BoE Governor Andrew Bailey pushed back against expectations of an imminent tightening cycle, saying the disinflation process remains intact.