- GBP/USD gains as markets price in the possibility of two BoE hikes in 2026 amid rising inflation fears.
- The US Dollar may strengthen on safe-haven demand amid escalating Iran tensions following Trump’s recent threats.
- Trump gave no clarity on reopening Hormuz, warning of intensified military action over the next two to three weeks.
GBP/USD inches higher after registering modest losses in the previous day, trading around 1.3230 during the Asian hours on Friday. Trading activity may remain subdued due to the Good Friday holiday.
The Pound Sterling (GBP) receives some support as markets are pricing in two Bank of England rate hikes in 2026 amid rising energy prices and inflation concerns. However, BoE Governor Andrew Bailey recently warned that expectations may be overstated.
However, the upside of the GBP/USD pair could be limited as the US Dollar (USD) could gain ground amid rising safe-haven demand following the recent Iran threats from US President Donald Trump.
US President Donald Trump offered no clarity on steps toward reopening the Strait of Hormuz, warning of intensified military action over the next two to three weeks and issuing strong threats against Iran. Iran’s Foreign Minister Abbas Araghchi responded that recent US strikes on civilian infrastructure would not force a retreat, describing them instead as evidence of an opponent in disarray and moral decline.
Chicago Fed President Austan Goolsbee expressed concern over rising oil prices, noting they could complicate efforts to curb inflation, particularly if gasoline costs surge and lift inflation expectations.
