Sterling Falls on US-Iran Tensions, UK Political Uncertainty
Sterling Falls Amid US-Iran Tensions and UK Political Uncertainty
Sterling declined as escalating US-Iran tensions and renewed political uncertainty in the UK weighed on risk sentiment, according to Convera's George Vessey. The currency fell 0.2% to $1.3404 after hitting a 10-day low of $1.3364.
US-Iran Tensions Impact Markets
US forces conducted new strikes against Iran on Wednesday after Tehran launched drones at commercial ships in the Strait of Hormuz. These developments dented global risk appetite, putting pressure on sterling.
UK Political Uncertainty
A special election next month threatens to trigger a prolonged leadership contest for Prime Minister Keir Starmer if his potential challenger Andy Burnham wins. This adds to sterling's vulnerability.
Vessey noted, "Overall, sterling looks increasingly vulnerable, with near-term resilience giving way to a more fragile, risk-sensitive profile." The euro rose 0.1% to 0.8663 pounds after hitting a nine-day high of 0.8668 earlier.
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