Pound Sterling continues to underperform amid US-Israel war with Iran

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The Pound Sterling (GBP) trades lower against its major currency peers, slides 0.3% to near 1.3360 against the US Dollar (USD) during the European trading session on Tuesday.

The Pound Sterling underperforms its major peers amid the war between the US, Israel, and Iran.
Dovish BoE expectations have diminished amid surging oil prices.
Investors await the US NFP data for fresh cues on the Fed’s monetary policy outlook.

The Pound Sterling (GBP) trades lower against its major currency peers, slides 0.3% to near 1.3360 against the US Dollar (USD) during the European trading session on Tuesday. The GBP/USD pair tumbles as risk-off market sentiment is prompted due to the war in the Middle East between the United States (US), Israel, and Iran, which has dampened the demand for riskier assets.

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.21%	0.35%	-0.03%	0.03%	0.04%	0.31%	0.22%
EUR	-0.21%		0.15%	-0.26%	-0.18%	-0.17%	0.09%	0.00%
GBP	-0.35%	-0.15%		-0.38%	-0.31%	-0.31%	-0.04%	-0.13%
JPY	0.03%	0.26%	0.38%		0.08%	0.09%	0.34%	0.26%
CAD	-0.03%	0.18%	0.31%	-0.08%		0.00%	0.27%	0.17%
AUD	-0.04%	0.17%	0.31%	-0.09%	-0.01%		0.26%	0.17%
NZD	-0.31%	-0.09%	0.04%	-0.34%	-0.27%	-0.26%		-0.09%
CHF	-0.22%	-0.00%	0.13%	-0.26%	-0.17%	-0.17%	0.09%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

Soaring energy prices due to conflicts in the Middle East have inspired fears of rising inflation in the United Kingdom (UK), a scenario that could diminish overall household spending.

In response to the war situation, Bank of England (BoE) Monetary Policy Committee (MPC) member Alan Taylor said in a conference hosted by Norway's central bank on Monday that it is too soon to ascertain the impact of rising oil prices on the UK inflation and growth outlook; however, the central bank is closely tracking the event, Reuters reported.

Fears of accelerating price pressures in the UK economy amid surging oil prices have forced traders to trim dovish BoE expectations. Traders now see less than a 50% chance of a BoE rate cut in March, compared to nearly 80% before markets opened on Monday, Reuters reports.

Meanwhile, the US Dollar (USD) trades firmly as its safe-haven demand has increased amid the US-Iran war. During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades firmly near its almost six-week high around 98.75.

Going forward, investors will focus on the US Nonfarm Payrolls (NFP) data for February, which will be released on Friday. Investors will pay close attention to the US employment data to get fresh cues on the Federal Reserve’s (Fed) monetary policy outlook.