The British pound (GBP/USD) edged lower in Asian trading on Thursday, trading around 1.3530. Renewed tensions in the Middle East fueled global risk aversion, leading to capital flows into safe-haven assets such as the US dollar, putting downward pressure on the pound. The US military launched further military operations against Iranian targets, stating that the action was aimed at ensuring the safety of shipping in the Strait of Hormuz. Subsequently, reports of explosions in several Iranian regions further escalated tensions. Meanwhile, Iran stated that if previous understandings with the US fail to deliver tangible benefits, there will be no reason for it to continue adhering to those arrangements, further fueling market concerns about the continued escalation of regional conflict. The Strait of Hormuz handles approximately 20% of global seaborne crude oil transport. Increased transport risks have driven up international oil prices and enhanced the safe-haven appeal of the US dollar. As a result, the pound sterling has faced short-term pressure against the dollar, and market risk appetite has declined significantly. Besides geopolitical risks, domestic political changes in the UK are also attracting investor attention. The market expects Andy Burnham to officially assume the premiership on July 20th, with the formation of his fiscal team and the future direction of fiscal policy becoming the focus of market attention. Given the significant pressure on UK public finances, the new government's fiscal policies could impact UK economic growth and financial market performance. Meanwhile, rising energy prices are altering market perceptions of the Bank of England's policy path. The continued rise in international oil prices increases the risk of a future inflation rebound, and the market is beginning to anticipate that the Bank of England may need to maintain a tighter policy for a longer period to prevent inflation from rising again. Based on market pricing, investors now largely expect the Bank of England to raise interest rates once at its November policy meeting, and anticipate a second rate hike possibly before April 2027. Before the escalation of the Middle East situation, the market generally expected the Bank of England to have room for two more rate cuts this year, indicating a significant reversal in policy expectations. However, rising expectations of a Bank of England rate hike have not effectively supported the pound, mainly because the dollar is also driven by safe-haven demand, and the overall resilience of the US economy maintains its relative advantage. Next, the market will see the release of UK monthly GDP data and US June retail sales data. UK GDP will reflect economic growth; weak data could reduce the Bank of England's room for further tightening. US retail sales data will influence market expectations regarding the US economy and the Federal Reserve's policy outlook, and is expected to be a significant catalyst for the short-term movement of the pound against the dollar. From a daily chart perspective, the pound against the dollar has recently pulled back after a surge, currently hovering around 1.3530, maintaining a high-level consolidation pattern. The MACD indicator shows signs of a bearish crossover at high levels, with the red bars narrowing, indicating weakening bullish momentum. The 60-day moving average continues to rise, providing medium-term support for the exchange rate. The key resistance levels to watch are 1.3600 and 1.3650. A break above 1.3600 could see the bulls challenge previous highs again. On the downside, support levels are 1.3500, 1.3450, and 1.3400. A break below 1.3500 could extend the short-term correction. Looking at the 4-hour chart, the price has entered a consolidation phase after breaking below short-term moving averages. The MACD is near the zero line, and the RSI has fallen back to neutral territory, indicating increased market caution. If UK GDP data is better than expected while US retail sales are weak, the pound/dollar pair could regain a foothold above 1.3550 and challenge 1.3600. Conversely, if UK economic data is weak and US data remains strong, the price may fall further to around 1.3450 for support. Editor's Summary: The short-term decline in the pound against the dollar was mainly driven by safe-haven demand stemming from escalating tensions in the Middle East. The dollar saw inflows, while the pound was affected by cooling risk sentiment. Meanwhile, rising international oil prices prompted the market to reassess the Bank of England's policy path, significantly increasing expectations of a UK interest rate hike, but this was not enough to completely offset the dollar's safe-haven advantage. Future exchange rate movements will continue to revolve around UK economic data, policy expectations from the Federal Reserve and the Bank of England, and developments in the Middle East. If the UK economy remains resilient and the Bank of England releases a more hawkish signal, the pound is expected to receive some support; however, if global risk aversion continues to rise, the dollar may remain relatively strong, and the pound/dollar exchange rate may continue its high-level, slightly weaker trend in the short term.