GBP/USD steadies near 1.3500 as Hormuz tensions curb upside

GBP/USD stabilized near 1.3500 as escalating tensions in the Strait of Hormuz boosted demand for safe-haven assets, including the US dollar. The geopolitical risk premium from potential disruptions to oil shipments through the strategic waterway has strengthened the dollar via increased risk aversion and safe-haven capital flows. While the pound showed relative resilience, broader USD strength limited its upside, particularly against a dollar benefiting from elevated global uncertainty. Energy markets and Treasury yields are key transmission channels, with rising oil prices potentially reinforcing inflation concerns that support higher-for-longer US rate expectations. Traders will watch the next U.S. CPI release and developments in Middle East diplomatic engagements for cues on risk sentiment and dollar direction.

The US Dollar (USD) is the world's primary reserve currency and the base for most forex majors. Headlines about Federal Reserve policy, US macro data (CPI, NFP, GDP), and Treasury yield shifts typically drive USD pair direction within seconds of release.

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