June 24, 2025 – Written by David Woodsmith
STORY LINK Pound Sterling Jumps Against Euro and Dollar on Tentative Israel-Iran Truce
The British Pound Sterling (GBP) advanced against currency rivals the US Dollar (USD) and Euro (EUR) on Tuesday, climbing to its highest level in a week as markets reacted to the ceasefire deal between Israel and Iran.
At the time of writing, the GBP/USD exchange rate was trading around $1.3600. Up roughly 0.4% from Tuesday’s opening levels. The Poudn to Euro exchange rate (GBP/EUR) was trading at around €1.1733.
The US Dollar (USD) came under significant pressure on Tuesday as the safe-haven currency saw demand retreat sharply in response to the Israel-Iran ceasefire.
Following President Donald Trump’s announcement of the truce on Monday evening, investor sentiment brightened considerably, prompting a broad selloff in the ‘Greenback’.
The shift in risk appetite reversed the gains the US Dollar had made at the start of the week as tensions escalated in the wake of US strikes on Iranian nuclear sites over the weekend.
Adding to the pressure on USD were Trump’s renewed calls for the Federal Reserve to slash interest rates. In a post on social media, Trump insisted rates should be cut by ‘at least two or three percentage points,’ just hours ahead of Fed Chair Jerome Powell’s latest testimony before Congress.
This revived concerns over how the president is trying to influence monetary policy and what this means for the US central bank’s independence.
In contrast, the Pound (GBP) benefited from the broad shift in risk sentiment, firming on Tuesday alongside other risk-sensitive currencies.
Sterling also drew modest support from lingering optimism following the release of upbeat UK PMI data earlier in the week.
Additionally, GBP traders kept an eye on an upcoming speech by Bank of England Governor Andrew Bailey, expecting him to echo the relatively hawkish stance signalled at last week’s interest rate decision and potentially downplay the likelihood of an imminent rate cut.
Looking ahead, the trajectory of GBP/USD is likely to remain tied to the global risk environment in the coming sessions.
Should the ceasefire agreement hold, the US Dollar may continue to struggle as investors favour riskier assets. However, amid reports the truce has already been violated, there a strong chance we could see a revival of safe-haven demand trigger a rebound in ‘Greenback’.
Meanwhile, with no major UK data releases on the immediate horizon, broader market sentiment is likely to continue steering Pound movement in mid-week trade.
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TAGS: Pound Dollar Forecasts
