The pound sterling has returned to a consolidation phase against the dollar, awaiting the decisions of the Bank of England and the Bank of America.
2026-06-17 10:23:57
The British pound (GBP/USD) continued its rebound against the US dollar in Asian trading on Wednesday, trading around 1.3430. The impending signing of a temporary peace agreement between the US and Iran has raised market expectations for further easing of tensions in the Middle East, significantly improving risk appetite and driving funds towards riskier currencies such as the pound, while simultaneously weakening the dollar's appeal as a safe-haven asset.
The United States and Iran are expected to sign a preliminary agreement this Friday, followed by two months of negotiations to finalize the deal. US President Trump stated that the Strait of Hormuz is expected to resume normal navigation on Friday, and the US will allow Iran to immediately resume crude oil and fuel exports. The Strait of Hormuz handles approximately 20% of global seaborne crude oil transport; its expected resumption of operations is expected to push down international oil prices and reduce the risks of global energy supply shortages and rising inflation.
Market focus has now shifted to UK inflation data and the Federal Reserve policy meeting. The market widely expects the Fed to maintain the target range for the federal funds rate at 3.50% to 3.75% at its June meeting. Investors will be closely watching the remarks of new Fed Chairman Kevin Warsh at the press conference to gauge the future path of monetary policy. If the Fed signals a more hawkish stance, the dollar may regain buying interest, thus limiting further upside for the pound.
In the UK, the Bank of England is expected to keep its benchmark interest rate unchanged at 3.75% on Thursday. Bank of England Governor Andrew Bailey believes the central bank has ample time to observe whether the recent rise in energy prices will have a lasting impact on UK inflation. With the recent significant decline in international oil prices, market bets on further interest rate hikes by the Bank of England have decreased considerably. Previously, the futures market had anticipated three possible rate hikes by the Bank of England, but the market has now shifted its expectation to maintaining stable interest rates in the short term.
From a technical perspective, the daily chart shows that GBP/USD is still oscillating around key moving averages, with the price repeatedly struggling within the 1.3400-1.3450 range, and the trend direction remains unclear. A break above the resistance near 1.3450 could lead to further testing of the 1.3500 and 1.3550 areas; a break below the key support at 1.3400 could reopen downside potential, targeting around 1.3350. Daily momentum indicators remain neutral, suggesting the market is awaiting fundamental events to determine a new direction.
From a 4-hour chart perspective, the GBP/USD pair has shown some short-term improvement, with the price returning to near the short-term moving averages. Bullish momentum has recovered somewhat, but the sustainability of the upward trend still needs further confirmation. As long as the exchange rate remains above 1.3400, there is still a chance to challenge the 1.3450 resistance level in the short term. However, if the Federal Reserve releases an unexpectedly hawkish stance, pushing the dollar stronger, the pound may fall back and test the 1.3350 support area.
Editor's Summary:
The pound is currently supported by improved risk appetite due to easing tensions in the Middle East, but the policy outlook of the central banks of the UK and the US remains the core factor determining its short-term direction. The decline in international oil prices has reduced market concerns about persistently high inflation, decreasing the need for the Bank of England to further tighten policy. In the short term, UK CPI data, the Federal Reserve's interest rate decision, and Chairman Kevin Warsh's speech will be key catalysts. If risk sentiment continues to improve and the dollar remains weak, the pound is expected to break through 1.3450 and challenge higher levels; conversely, if the Fed adopts a hawkish stance, the exchange rate may fall back below 1.3400.
The United States and Iran are expected to sign a preliminary agreement this Friday, followed by two months of negotiations to finalize the deal. US President Trump stated that the Strait of Hormuz is expected to resume normal navigation on Friday, and the US will allow Iran to immediately resume crude oil and fuel exports. The Strait of Hormuz handles approximately 20% of global seaborne crude oil transport; its expected resumption of operations is expected to push down international oil prices and reduce the risks of global energy supply shortages and rising inflation.
Market focus has now shifted to UK inflation data and the Federal Reserve policy meeting. The market widely expects the Fed to maintain the target range for the federal funds rate at 3.50% to 3.75% at its June meeting. Investors will be closely watching the remarks of new Fed Chairman Kevin Warsh at the press conference to gauge the future path of monetary policy. If the Fed signals a more hawkish stance, the dollar may regain buying interest, thus limiting further upside for the pound.
In the UK, the Bank of England is expected to keep its benchmark interest rate unchanged at 3.75% on Thursday. Bank of England Governor Andrew Bailey believes the central bank has ample time to observe whether the recent rise in energy prices will have a lasting impact on UK inflation. With the recent significant decline in international oil prices, market bets on further interest rate hikes by the Bank of England have decreased considerably. Previously, the futures market had anticipated three possible rate hikes by the Bank of England, but the market has now shifted its expectation to maintaining stable interest rates in the short term.
From a technical perspective, the daily chart shows that GBP/USD is still oscillating around key moving averages, with the price repeatedly struggling within the 1.3400-1.3450 range, and the trend direction remains unclear. A break above the resistance near 1.3450 could lead to further testing of the 1.3500 and 1.3550 areas; a break below the key support at 1.3400 could reopen downside potential, targeting around 1.3350. Daily momentum indicators remain neutral, suggesting the market is awaiting fundamental events to determine a new direction.
From a 4-hour chart perspective, the GBP/USD pair has shown some short-term improvement, with the price returning to near the short-term moving averages. Bullish momentum has recovered somewhat, but the sustainability of the upward trend still needs further confirmation. As long as the exchange rate remains above 1.3400, there is still a chance to challenge the 1.3450 resistance level in the short term. However, if the Federal Reserve releases an unexpectedly hawkish stance, pushing the dollar stronger, the pound may fall back and test the 1.3350 support area.
Editor's Summary:
The pound is currently supported by improved risk appetite due to easing tensions in the Middle East, but the policy outlook of the central banks of the UK and the US remains the core factor determining its short-term direction. The decline in international oil prices has reduced market concerns about persistently high inflation, decreasing the need for the Bank of England to further tighten policy. In the short term, UK CPI data, the Federal Reserve's interest rate decision, and Chairman Kevin Warsh's speech will be key catalysts. If risk sentiment continues to improve and the dollar remains weak, the pound is expected to break through 1.3450 and challenge higher levels; conversely, if the Fed adopts a hawkish stance, the exchange rate may fall back below 1.3400.
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