Sterling Dips as Hormuz Hopes Lift Dollar and Rate Hike Bets

Sterling's value against the US dollar dipped by 0.17% on Tuesday as news broke that Iran could reopen the Strait of Hormuz within seven days if Washington lifts its blockade and stops military operations.

The GBP/USD exchange rate reached a low of 1.3343 after touching 1.3387, while the US Dollar Index rose by 0.27% to 100.69, nearing a two-month high.

Markets are weighing the prospect of another Federal Reserve rate hike before year-end, which could further boost the dollar's value.

The ADP Employment Change four-week average increased to 20K from 16.75K, suggesting firmer labour data, and US President Donald Trump indicated that an agreement with Iran could follow the US midterm election in November.