Last Updated on 04/08/2026
- GBP/USD edged lower to around 1.3425 during the early Asian session on Tuesday as investors favored the safe-haven US Dollar amid ongoing uncertainty surrounding US-Iran relations.
- US President Donald Trump maintained that discussions with Iran are currently taking place, while Iranian officials rejected the claim and stated that no negotiations are underway, adding to geopolitical uncertainty.
- Meanwhile, the US Dollar received additional support after the ISM Manufacturing PMI rose to 55.6 in July, beating market expectations and signaling stronger-than-anticipated expansion in the manufacturing sector.
GBP/USD Slides Toward 1.3425 as Safe-Haven Dollar Gains on US-Iran Uncertainty
The GBP/USD pair weakened to around 1.3425 during Tuesday’s early Asian trading session, with the US Dollar attracting safe-haven demand amid persistent uncertainty surrounding potential US-Iran negotiations.
US President Donald Trump stated on Monday that discussions with Iran remain active, describing the situation as Tehran’s “last chance” to reach an agreement. He also indicated that negotiations could begin within the next few days with the aim of reopening the Strait of Hormuz and addressing US concerns over Iran’s nuclear activities.
However, Iranian officials rejected Trump’s claims. Foreign Ministry spokesperson Esmaeil Baghaei said that no talks with Washington are currently underway and emphasized that Iran is focused on negotiations with Oman regarding the Strait of Hormuz.
The Greenback also drew support from stronger-than-expected US economic data. The Institute for Supply Management (ISM) reported that the Manufacturing PMI climbed to 55.6 in July from 53.3 in June, surpassing market forecasts of 54.0 and signaling continued strength in the manufacturing sector.
Market participants are now turning their attention to the US July employment report due later this week, which could provide fresh clues about the outlook for the Federal Reserve and the US Dollar.
Meanwhile, sterling remains under pressure despite a relatively hawkish vote split at the Bank of England’s latest policy meeting. The BoE left interest rates unchanged at 3.75% in a 6-3 decision, with three policymakers favoring a rate increase. Nevertheless, Governor Andrew Bailey struck a cautious tone, arguing that the disinflation process remains on track and dampening expectations of an aggressive tightening cycle. Investors currently anticipate only one additional BoE rate hike before year-end.
Analysts at Rabobank noted that speculative bearish positions against the Pound increased ahead of the BoE meeting. While the Monetary Policy Committee delivered a more hawkish voting outcome than expected, Bailey’s dovish remarks limited support for sterling, leaving overall sentiment toward the currency subdued.
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