GBP/USD tumbles below 1.3550 amid risk-off sentiment
The GBP/USD pair loses ground to near 1.3530 during the early European session on Friday. The Pound Sterling (GBP) weakens against US Dollar (USD) due to heightened geopolitical tensions in the Middle East. Investors brace for the preliminary reading of the US Michigan Consumer Sentiment report, which is due later on Friday.
Israeli Defense Minister Israel Katz said late Thursday that there had been a “preemptive strike against Iran” and declared a state of emergency as the country prepared for retaliation.
Meanwhile, Israel's Prime Minister Benjamin Netanyahu noted that the operation will continue for as many days as it takes.
Iranian state media conveyed a statement from Iran's Armed Forces General Staff that the US and Israel will receive a "harsh blow" in response. Fresh confrontations in the Middle East raise the fears of geopolitical risks and exert some selling pressure on the riskier currencies like the Cable.
On the other hand, cooler-than-expected US Producer Price Index (PPI) inflation data released on Thursday have lifted the prospect for a rate cut from the US Federal Reserve (Fed).
This, in turn, could undermine the US Dollar and act as a tailwind for the major pair.
The US Producer Price Index (PPI) rose 0.1% MoM in May, compared to a decline of 0.2% (revised from -0.5%), the Bureau of Labor Statistics reported on Thursday. This reading came in softer than the estimations of a 0.2% rise. Meanwhile, the core PPI, excluding food and energy, increased 0.1% MoM in May versus -0.2% prior (revised from -0.4%), below the market consensus of 0.3%.
Source: FXStreet
