Sterling Steady Amid U.S.-Iran Tensions and Impending UK Election

Sterling remains steady against the dollar amid tensions between the U.S. and Iran following missile and drone attacks by Iran on U.S. bases. Currency markets are focusing on Friday's UK GDP data and the upcoming Makerfield by-election that could influence UK fiscal policy and political stability.

Sterling held steady against the dollar on Wednesday, as markets closely watched the escalating tensions between the U.S. and Iran. Iran's latest missile and drone attacks on U.S. bases in Jordan, Kuwait, and Bahrain, in response to U.S. strikes, had little impact on currency markets focused on future conflict resolution.

The currency markets await fresh UK GDP data due Friday, with next week's economic indicators, including inflation and retail sales figures. An interest rate decision from the Bank of England is also looming, alongside the highly anticipated Makerfield by-election, set to influence political dynamics in the UK.

Attention turns to the potential return of Greater Manchester Mayor Andy Burnham to Westminster if he secures a win in the by-election, as his victory may ignite a Labour Party leadership challenge, influencing UK fiscal policy. Jane Foley from Rabobank suggested that political uncertainties could weigh on sterling, alongside the Bank of England's anticipated interest rate decision.