Markets head into the new week with geopolitics once again dominating sentiment, as negotiations between the US and Iran appear to be entering their most critical phase yet.
The US Dollar has steadied overnight after yesterday's Federal Reserve meeting minutes showed that more policymakers were in favour of interest rate hikes.
Yesterday afternoon we did see GBP regain some of its recent losses to the USD and EUR. It came after what could be UK’s next Prime Minister, Andy Burnham confirming he won’t try to amend the existing fiscal policies that have been designed to create sustainability of the country’s debt liabilities.
The political situation in the UK is continuing to catch headlines. Keir Starmer is still under immense pressure and with MP's resigning cause they don't believe in the leadership, raises eyebrows of what's to come next.
U.S Producer Price Inflation shot up against expectations yesterday, overperforming by 1.2% which has been put down largely to the impacts from the Middle Eastern conflict.
This morning has seen the US Dollar lose some momentum, as Donald Trump stated last night that the operation Project Freedom will be paused as a deal with Iran edges closer.
Tensions are brewing in the Middle East, after US and Iran exchanged fire against each other in the Strait of Hormuz, in the early hours.
The Bank of England has maintained the base interest rate at 3.75%, though it issued a firm warning that hikes are looming. The primary driver for this hawkish shift is the ongoing conflict in Iran, which continues to exert significant inflationary pressure on the UK economy.
