British Pound Holds Near Three-Week Low as Fed Rate-Cut Bets and Iran Tensions Bolster the US Dollar

Last Updated on 03/09/2026

• GBP/USD bulls remain cautious as expectations for Fed policy help curb the dollar’s decline following weak US ADP employment data.
• Rising US-Iran tensions continue to support the safe-haven US dollar, keeping upward pressure on GBP/USD limited.
• Traders await the US ISM Services PMI for fresh direction ahead of Friday’s Nonfarm Payrolls (NFP) report.

The GBP/USD pair remains below the key 1.3500 level during Thursday’s Asian session, consolidating near a three-week low reached in the previous session.

The US Dollar (USD) steadies after retreating the day before, supported by expectations for tighter Federal Reserve (Fed) policy and ongoing geopolitical uncertainty. Markets have increased bets that the Fed could raise interest rates this month following hawkish comments from Fed Chair Kevin Warsh last Friday. Rising energy prices also add to inflation concerns, strengthening the case for tighter monetary policy and providing support for the USD, which weighs on GBP/USD.

At the same time, US-Iran tensions have intensified after fresh US strikes on Iranian targets were followed by retaliatory drone and missile attacks from Tehran across the Gulf. Persistent confrontations around the Strait of Hormuz are keeping geopolitical risks elevated and further boosting demand for the safe-haven US Dollar. However, weaker US Treasury yields are preventing USD buyers from making aggressive moves and helping limit downside pressure on GBP/USD.

Investors now await the US ISM Services PMI for fresh trading signals, while Friday’s closely watched Nonfarm Payrolls (NFP) report remains the main focus. Further developments in the Middle East could also drive volatility across financial markets, influencing USD movements and creating short-term trading opportunities in GBP/USD.

GBP/USD Technical Analysis

On the 4-hour chart, GBP/USD is trading near the 200-period Simple Moving Average (SMA) and remains above the 50.0% Fibonacci retracement of the July-August advance. A decisive break below this level could expose the pair to deeper Fibonacci support at 1.3425 and 1.3357, where buyers may attempt to defend the broader bullish structure.

On the upside, immediate resistance stands at the 38.2% Fibonacci retracement near 1.3521, followed by the 23.6% level at 1.3580. Further gains could bring the cycle-high resistance around 1.3676 into focus.