• GBP/USD struggles to attract any meaningful buyers as rising US-Iran tensions support the USD.
• Renewed inflation concerns fuel hawkish Fed expectations and further underpin the Greenback.
• Rising BoE rate hike bets hold back bears from placing fresh bets around the GBP and the pair.

The GBP/USD pair enters a bearish consolidation phase and trades around the 1.3465 region during the Asian session on Friday, just above a nearly two-week low set the previous day. Spot prices remain on track to snap a two-week winning streak and seem vulnerable to extend this week's rejection slide from the 1.3600 mark, or over a two-month high, amid a bullish US Dollar (USD).

Despite a temporary extension of the US-Iran ceasefire, investors remain concerned over intensifying tensions in the Middle East amid the lack of progress in peace talks due to the American blockade of Iranian ports. Furthermore, the US-Iran standoff over the Strait of Hormuz dampens hopes for a durable de-escalation. This might continue to underpin the Greenback's status as the global reserve currency and act as a headwind for the GBP/USD pair.

Meanwhile, continued disruptions to energy supplies through the strategic waterway remain supportive of elevated Crude Oil prices and continue to fuel worries about a significant surge in global inflation. This could prompt a more hawkish stance from major central banks, including the US Federal Reserve (Fed). The outlook could turn out to be another factor lending support to the USD and validating the negative outlook for the GBP/USD pair.

That said, market bets on Bank of England (BoE) rate hikes increased following the release of stronger-than-expected UK PMI data on Thursday. In fact, traders are currently pricing in a roughly 60 basis points (bps) of tightening by end-2026 and a 70% chance of a rate hike in June. This, in turn, is holding back traders from placing aggressive bearish bets around the British Pound (GBP) and helps limit the downside for the GBP/USD pair.

Moving ahead, Friday's economic docket features the release of the UK Retail Sales report and the revised University of Michigan US Consumer Sentiment Index. This could provide some impetus during the latter part of the day. The market focus, however, remains glued to geopolitical developments, which might continue to infuse volatility across the global financial markets and produce some meaningful trading opportunities around the GBP/USD pair.