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- GBP/USD flatlines near 1.3450 in Monday’s early Asian session.
- The US launched a new wave of Iran strikes on Sunday, extending its military campaign into a ninth straight night.
- Andy Burnham becomes UK Labour leader, the last step before taking over as Prime Minister.
The GBP/USD pair trades on a flat note around 1.3450 during the early Asian session on Monday. Traders continue to assess the developments surrounding US-Iran tensions after the US said that a third American troop was killed in the past two days. The UK employment report will be in the spotlight later on Tuesday.
The US reported the death of another American service member, who was killed in northern Iraq during the controlled detonation of a downed Iranian drone. US Central Command (CENTCOM) also said on Sunday that it has located unidentified remains in Jordan, where a separate Iranian attack left two US troops dead and one missing in action, per Bloomberg.
A week of back-and-forth strikes has expanded beyond strictly military targets to include bridges, utilities, and port facilities, raising fears of a prolonged conflict in the Middle East. This, in turn, could weigh on riskier assets, such as the British Pound (GBP), against the US Dollar (USD) in the near term.
However, signs of softer US consumer and producer inflation have dampened the US Federal Reserve (Fed) rate-hike bets, which might cap the upside for the Greenback. The chance for a Fed rate hike in July stood at 14%, versus a 25% implied odds last week, according to the CME FedWatch tool. Traders are pricing in 30 basis points (bps) of hikes by December.
The probability for a Fed rate hike in July stood at 14%, versus a 25% implied chance last week, according to the CME FedWatch tool. Traders are pricing in 30 basis points (bps) of hikes by December.
