GBP/USD drops to near 1.3200 due to risk-off mood amid rising tensions in the Middle East
- GBP/USD depreciates due to risk aversion amid rising geopolitical tensions in the Middle East.
- The US Dollar receives support as Treasury yields continue to gain ground.
- The BoE advocates a cautious approach to reducing rates, considering the persistently high inflation in the services sector.
GBP/USD extends its losing streak for the third consecutive day, trading around 1.3200 during the Asian session on Thursday. The risk-sensitive GBP/USD pair receives downward pressure due to the safe-haven flows amid escalating Middle-East tensions.
The Israeli Broadcasting Authority (IBA) reported that Israel's security cabinet has decided to issue a strong response to the recent Iranian attack. On Tuesday night, Iran launched over 200 ballistic missiles and drone strikes on Israel.
The improved US Treasury yields are supporting the US Dollar and undermining the GBP/USD pair. The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against its six major peers, continues to gain ground for the fourth successive session. The DXY trades around 101.80 with 2-year and 10-year yields on US bonds standing at 3.65% and 3.79%, respectively, at the time of writing.
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