The British Pound gained 0.10% on Monday following a de-escalation in Middle East tensions after Iran and Israel agreed to cease hostilities. The modest rally came despite weekend attacks between the two nations, with US President Donald Trump successfully pushing for an immediate halt to military action and calling for renewed diplomatic talks between Washington and Tehran. Risk appetite returned to markets as traders assessed the reduced threat of broader regional conflict that could disrupt global energy supplies and trade flows.
Sterling’s advance reflects a broader shift toward risk-on sentiment across currency markets, with traders moving away from safe-haven assets. The cessation of hostilities removes immediate geopolitical premium from oil prices and reduces uncertainty for UK-exposed assets. Brokers and forex traders are monitoring whether this diplomatic breakthrough holds, as any resumption of conflict could quickly reverse current positioning.
FXnCO Insight
The Pound’s gains remain vulnerable to headline risk—maintain tight stops on GBP longs as Middle East ceasefire sustainability remains uncertain and could trigger rapid reversals.
Source: FXStreet