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Sterling slumps as Trump pledges more Iran strikes, boosting the safe‑haven Dollar

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The Pound declined sharply on Thursday after US President Donald Trump promised more aggressive strikes on Iran and offered little clarity on the reopening of the Strait of Hormuz, driving oil prices higher and pushing investors toward the US Dollar.


At the time of writing, Sterling was trading down 0.7% at $1.321, following a 0.6% gain the previous day amid hopes that the conflict might be easing.


The fall was largely driven by a surge in the Dollar, regarded as a safe-haven currency, with the index tracking the greenback against its peers rising 0.5%, Reuters news agency reports.


In a televised address on Wednesday, President Trump announced that military operations would be stepped up over the next two to three weeks, providing no specific timeline for when the conflict might end.


“We're going to hit them extremely hard over the next two to three weeks. We're ​going to bring them back to the Stone Ages where they ​belong,” he stated.Furthermore, Trump said that the US does not rely on the Strait of Hormuz and once again urged allies dependent on Gulf oil to take action to reopen it.


Following his remarks, oil prices surged while stock markets and equity futures fell. Brent crude, the global benchmark, last rose 6.6% to $107.90 a barrel.


Investors are showing the risk-averse behaviour seen throughout the conflict. As crude prices surge, most assets are being pushed lower, with the US Dollar standing out as the primary safe-haven currency.


The Pound and UK government bonds have faced significant pressure during the conflict, highlighting concerns about the economy amid the country’s dependence on imported energy and its fragile public finances.


Sterling fell against the Euro on Thursday, with the single currency rising 0.15% to 87.24 pence.

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Mauritius,
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Lithuania,

media contact

About

deVere Group – Foreign Exchange’s Public Relations Department deals with all areas of the media and external communications including international, national, regional, local, trade, consumer, print, broadcast, social and online. The Department aims to provide a helpful service to journalists, broadcasters and editors, amongst others, and reply to all media enquiries, including urgent enquiries out of hours, within agreed deadlines.

Contact

Our press office does not have access to client details and will not be able to assist with individual client enquiries. Please contact deVere Group – Foreign Exchange’s Head of Public Relations on [email protected] or call +44 2071220925.