The British pound declined on Monday, with GBP/USD last at 1.3631, down 0.10% as of 04:40 ET, as traders weighed policy uncertainty in Washington and the prospect of new sanctions on Iran.
The U.S. dollar index, measured by the DXY, held within a 98.50–99 range, consolidating after recent volatility. EUR/USD also slipped 0.10% to 1.1665, hovering near support levels around 1.1660–1.1670. The dollar’s gains were modest, with the index up 0.18%, while the euro and pound both posted declines.
ING’s Global Head of Markets and UK & CEE Research, Chris Turner, noted that further unwinding of dollar long positions may still be possible, cautioning against premature calls of a bottom in the greenback’s recent slide. Turner also highlighted that the dollar’s trajectory remains sensitive to U.S. policy signals, particularly from the Federal Reserve.
U.S. Treasury Secretary Scott Bessent is expected to announce new sanctions targeting Iran later on Monday, adding geopolitical pressure to currency markets. The move follows a period of heightened tensions in the Middle East, which has intermittently roiled risk assets and safe-haven flows.
Market focus is also shifting toward key U.S. economic data, including the July core PCE inflation reading due on Wednesday. Investors will be watching for signs of whether the Fed’s inflation-fighting stance remains credible ahead of Fed Governor Kevin Warsh’s keynote speech at the Jackson Hole symposium on Friday.
Analysts at ING have maintained a constructive outlook for EUR/USD, forecasting the pair at 1.17 by the end of September and 1.18 by year-end, subject to revisions based on incoming data and policy developments.
