Sterling Steady as Investors Weigh U.S.-Iran Peace Prospects

Sterling barely moved. The pair has been stuck in a 1.2680-1.2750 range for three sessions with no clear catalyst to break it. A sustained rise in crude would complicate the BoE path. Higher energy prices feed into headline CPI, potentially delaying cuts. So far the geopolitical bid has been modest. Brent stayed below the $86 resistance level that would begin to shift the inflation calculus, traders said.

The next scheduled data is UK GDP for May, due Thursday. A weak print would reinforce the case for an August cut, traders said, and could push sterling toward 1.2650. A steady number combined with Brent holding above $84 could keep the pair range-bound.

Any sign of de-escalation would pull oil lower and remove a support leg from the dollar, giving sterling room to test 1.2800. New military engagement would push crude toward $90 and likely send cable back toward the March lows near 1.2530, traders said.

For key levels on the pair, see the GBP/USD profile. The oil and yen moves after U.S.-Iran strikes offer a comparable playbook for how similar geopolitical events affect currency pairs.