Bond.az - Sterling edged lower on Thursday, weighed by a resurgent dollar as fresh U.S.-Iran military exchanges shattered hopes for a Strait of Hormuz deal.
GBP/USD fell 0.16% to 1.3405, while EUR/USD dropped 0.09% to 1.1616.
The geopolitical backdrop deteriorated sharply. U.S. forces struck a military site near Bandar Abbas overnight. Iran's IRGC retaliated against a US air base.
President Trump ruled out sanctions relief for Tehran, boosting dollar demand.
Hot US inflation data has repriced Fed expectations. Brent crude remains at $95-97/bbl.
ING notes sterling has fully unwound its political risk premium, which peaked in mid-May.
Focus turns to April PCE data due later Thursday. ING expects 0.3% month-on-month core.
ECB April minutes are also due, confirming groundwork for a June rate hike.
EUR/USD support at 1.1580-90 is seen as fragile if the Iran stalemate deepens.
