Sterling slides on Middle East conflict and UK politics
The pound dropped 0.20% to $1.34 as investors reacted to escalating tensions between the U.S. and Iran alongside potential leadership challenges within the Labour Party. While safe-haven demand supported the dollar, the euro reached its highest level against sterling since mid-May.
GBP/USD fell 0.20% to $1.34 as Middle East conflict and domestic leadership challenges pressured the currency. The pound hit $1.3368 during the session, its lowest level since May 18. Investors are pivoting toward safe-haven assets as geopolitical instability threatens global energy prices and inflation targets.
### Geopolitical Friction Drives Safe-Haven Demand The United States dollar strengthened after Iran Revolutionary Guards struck a U.S. airbase. This escalation followed President Donald Trump's rejection of reports that a deal with Tehran was imminent. Markets are pricing in heightened risk as doubts grow over the reopening of the Strait of Hormuz.
