GBP/USD is on the rise as the US Dollar shows signs of weakness, influenced by reports regarding a US-Iran peace agreement aimed at reopening the Strait of Hormuz. Trump announced that the agreement with the Islamic Republic of Iran is now finalised. The BoE is anticipated to maintain interest rates at their current level during the forthcoming monetary policy meeting on Thursday. GBP/USD is showing an upward trend after experiencing slight declines the day before, currently trading near 1.3450 in the Asian session on Monday. The pair rises as the US Dollar declines amid easing risk aversion following reports that the United States and Iran have agreed on a peace deal to end the war and reopen the Strait of Hormuz.
As reported on Sunday that the US President Trump stated that the agreement he reached with Iran would ultimately ensure that the Strait of Hormuz is “permanently toll-free.” Pakistan Prime Minister Shehbaz Sharif has announced that the United States and Iran have reached an agreement to conclude their nearly four-month conflict. Both parties have declared an immediate and permanent cessation of military operations across all fronts, including Lebanon. Iran’s National Security Council has confirmed a ceasefire agreement with the US, stating that discussions for a final deal will commence once the other party meets its obligations under the memorandum of understanding.
Iranian officials stated that the maritime blockade against Iran must cease immediately and completely. A 0.1% contraction in the UK economy this April, marking the first monthly decline since August, raises considerable uncertainty regarding the Bank of England’s potential to persist with interest rate hikes aimed at addressing inflation. While the central bank is anticipated to maintain current rates at its forthcoming meeting on Thursday, investors are attentively observing early inflation and employment figures for more definitive guidance.
Compounding this economic uncertainty is the June 18 Makerfield by-election, where a strong performance by Labour’s Andy Burnham could indicate a shift toward more expansionary fiscal policies. This creates additional challenges for Prime Minister Keir Starmer, who is already managing significant internal party discord and unprecedented voter discontent regarding his economic stewardship.