GBP/USD Dips on Starmer Uncertainty as USD Firms on Iran Deal Doubts

The US dollar firmed broadly as cracks emerged in the US-Iran peace deal framework, with threats from President Trump and provocative actions from Tehran reigniting geopolitical risk premiums. GBP/USD came under notable pressure as political uncertainty surrounding PM Starmer's leadership weighed on sterling sentiment, adding to headwinds from an already cautious market backdrop. The British pound's weakness reflected broader concerns about policy direction and governance stability in the UK. Meanwhile, USD/JPY pushed the yen toward a two-year low, prompting Japanese authorities to signal heightened vigilance over currency movements, raising the prospect of verbal or direct intervention. The escalation in US-Iran tensions supported crude oil prices and bolstered the dollar's safe-haven appeal, reversing some of the earlier optimism from breakthrough talks. Traders are closely watching Strait of Hormuz developments for supply disruption risks that could amplify volatility across commodity-linked and risk-sensitive pairs. Near-term, the dollar is likely to maintain a bid as long as geopolitical uncertainty persists, with GBP/USD vulnerable to further downside on any deepening of UK political instability.