Pound Sterling Price News and Forecast: GBP/USD gains ground to near 1.3430 early European session

FXStreet Team FXStreet

British Pound faces second straight weekly loss as tensions in the Middle East weigh ahead of US NFP

The GBP/USD pair holds modest gains near 1.3420 during the European trading hours on Friday. Despite the intraday rebound, the pair is set to register its second straight weekly loss as tensions in the Middle East weigh. Markets might turn cautious later in the day ahead of the key US employment report for May. The developments surrounding the US-Iran peace deal will also be closely watched.

US President Donald Trump's efforts to halt conflict in the Middle East and forge peace with Iran are facing fresh obstacles, after the Iran-backed Hezbollah militia rejected a new ceasefire in Lebanon on Thursday, while Israel said it would not withdraw troops from the country. Read more...

British Pound Sterling leans on hikes its economy can't justify

Sterling is standing on a bet that gets harder to justify by the week. Markets still lean toward Bank of England (BoE) rate hikes this year, even as the economy beneath the Pound flashes contraction rather than the overheating that would normally warrant tighter policy. The Pound is holding up, but it is holding up on borrowed conviction, and the lender is the energy market.

The data is not subtle. May's construction Purchasing Managers Index (PMI) printed near 38, deep in contraction territory, the labour market shed roughly 100K jobs in the latest read, the worst since 2020, and yet the Bank Rate sits at 3.75% with the curve still leaning toward more tightening. Wage growth running close to 4.1% gives the hawks something to point at, but raising rates into a shrinking economy is a narrow path, and one the BoE would clearly rather not be walking. Read more...

British Pound gains as Lebanon truce drama hits the US Dollar

The Pound Sterling (GBP) registers gains of over 0.16% on Thursday amid news that Israel and Lebanon agreed on a ceasefire, but headlines that Hezbollah rejected the plan triggered a retracement on Cable. The GBP/USD pair trades at 1.3439 after bouncing off daily highs of 1.3462.

Hostilities in the Middle East continued on Thursday, particularly Israel attacking the South of Lebanon. Meanwhile, Israeli forces began to withdraw from Dibbin in southern Lebanon, Al Hadath reported. Meanwhile, Iran reiterated that a ceasefire in Lebanon is crucial to advance in peace talks with the US. Read more...

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