Pound Rises as US-Iran Deal Lifts Risk Sentiment

2026-06-15 06:39 By Joana Ferreira 1 min. read

The British pound climbed past $1.34, reaching its highest level since early June, as investors shifted toward riskier assets following the US and Iran’s preliminary agreement to end their three-month conflict.

A framework deal, including the lifting of the US blockade and the reopening of the Strait of Hormuz, is set to be signed on Friday, though unresolved details remain around Iran’s nuclear program.

With the Bank of England's policy meeting approaching on Thursday, markets broadly anticipate that interest rates will be maintained at 3.75% in a divided vote, as officials consider rising inflation against a deteriorating labor market and weak economic expansion.

Traders have adjusted their expectations, now forecasting only a single rate increase this year, with a 25-basis-point rise not fully anticipated until December.

Additionally, the outcome of Thursday's special election in Makerfield could impact perceptions of Labour's leadership direction and future economic policies.



News Stream
Pound Rises as US-Iran Deal Lifts Risk Sentiment
The British pound climbed past $1.34, reaching its highest level since early June, as investors shifted toward riskier assets following the US and Iran’s preliminary agreement to end their three-month conflict. A framework deal, including the lifting of the US blockade and the reopening of the Strait of Hormuz, is set to be signed on Friday, though unresolved details remain around Iran’s nuclear program. With the Bank of England's policy meeting approaching on Thursday, markets broadly anticipate that interest rates will be maintained at 3.75% in a divided vote, as officials consider rising inflation against a deteriorating labor market and weak economic expansion. Traders have adjusted their expectations, now forecasting only a single rate increase this year, with a 25-basis-point rise not fully anticipated until December. Additionally, the outcome of Thursday's special election in Makerfield could impact perceptions of Labour's leadership direction and future economic policies.
2026-06-15
Sterling Set for Best Weekly Gain in a Month
The British pound traded flat just above $1.34, on track for its strongest weekly performance in nearly a month, as a weaker US dollar, spurred by optimism over a potential Middle East peace deal, provided support. US President Donald Trump hinted that a US-Iran agreement could be signed as early as this weekend, though Tehran stated no final decision had been reached. However, domestic economic concerns weighed on sentiment. Data showed the UK economy contracted by 0.1% in April, its first monthly decline since August, raising doubts about whether the Bank of England will proceed with rate hikes this year to tackle inflation. Investors are also focused on the June 18 Makerfield by-election, where Labour’s Andy Burnham, a potential challenger to Prime Minister Keir Starmer, could signal a shift toward more expansionary fiscal policies. Starmer currently faces internal party dissent and record voter dissatisfaction over his economic leadership.
2026-06-12
Pound Remains Weak as Middle East Tensions Weigh
The British pound traded just under $1.34 amid escalating Middle East tensions and growing expectations of a tighter Bank of England monetary policy. US and Iran exchanged air strikes, with US President Donald Trump threatening further action unless Tehran agrees to a peace deal immediately. Money markets currently price in at least a 25-basis-point rate hike by the Bank of England in September, with a probability of a second increase by the end of the year. Investors are now focused on Friday’s monthly GDP data, alongside manufacturing output and foreign trade balance figures. Forecasts indicate the UK economy likely shrank 0.1% in April due to the Iran conflict's delayed impact on businesses and consumers, with Labour Party leadership uncertainty adding to the downturn.
2026-06-11