GBP/USD Weakens, US Dollar Strengthens Amid Geopolitical Risk-Off
The pound sterling weakened on Monday (April 13), with GBP/USD trading around 1.3414. The 0.34% decline from the previous session indicates that sterling is still holding steady around 1.34, but is under pressure at the start of the week.
The main pressure came from the strengthening of the US dollar, which has been reclaimed as a safe-haven asset. Risk-off sentiment worsened after US-Iran peace talks failed to yield progress and the United States announced a blockade of Iranian ports, causing both the euro and pound to depreciate against the greenback.
In thin trading during the initial reaction, sterling briefly fell further, reflecting the pound's sensitivity to changes in the global risk mood. When headline volatility rises, investors tend to reduce exposure to riskier assets and shift funds to the dollar, limiting the recovery potential for GBP/USD.
Sterling was also overshadowed by concerns about the impact on energy prices, after oil prices surged again above US$100 per barrel. Although the UK is considered less dependent on energy imports than the eurozone, surging energy costs still have the potential to maintain inflationary pressures for longer and complicate the prospects for monetary policy easing.
Despite weakening this morning, the GBP/USD pair has not yet shown a major trend change. Movement in the 1.34 area reflects short-term pressures stemming from dollar dominance and a combination of geopolitical and energy risks, with its future direction largely determined by developments in the Middle East, oil prices, and broader dollar strength. (asd)
Source: Newsmaker.id
