14.06.2025 18:20

Geopolitical turmoil in the Middle East sent shockwaves through global currency markets on Friday, triggering a significant drop in the GBP/USD exchange rate. The Israeli attack on Iran sharply escalated tensions, prompting investors to seek the safety of the US dollar, a traditional safe-haven asset. This flight to safety resulted in the pound sterling plummeting more than 0.40% against the dollar.

Following a recent three-year high of 1.3632, the GBP/USD pair fell to levels around 1.3550. This substantial decline reflects the market's anxiety regarding the escalating conflict and its potential global economic repercussions. The uncertainty surrounding the situation is causing widespread risk aversion, negatively impacting the British pound's performance.

The pound's underperformance was widespread, affecting its value against most major currencies, with the exception of those from the Antipodean region. This weakness highlights the significant influence of the Middle East conflict on investor sentiment and the global financial landscape. The situation underscores the vulnerability of global markets to geopolitical events and their immediate impact on currency valuations.

Adding to the market's jitters, traders are anxiously awaiting the release of the preliminary US Michigan Consumer Sentiment report later in the day. This key economic indicator will further shape market sentiment and could exacerbate or alleviate the existing pressure on the GBP/USD pair, depending on its outcome. The combination of geopolitical instability and economic uncertainty created a volatile trading environment. The GBP/USD pair continued its descent, falling below the 1.3550 mark during early European trading. The uncertainty surrounding the conflict and upcoming economic data ensures that market volatility is expected to persist. Sources consulted include various internet sources.