Sterling rose against its major peers on Wednesday after Donald Trump said the war in Iran would be over in two to three weeks, lifting sentiment toward riskier assets.
The pound was stronger against the dollar (GBPUSD=X), up 0.4% to $1.3274. It was a similar scenario versus the euro (GBPEUR=X), with the British currency trading up 0.1% at €1.1458.
The US dollar index (DX-Y.NYB), which measures the currency against a basket of six major peers, dropped 0.3% to 99.65.
The gains in sterling came as demand for riskier assets improved overnight after Trump said the conflict in Iran would end in “two to three weeks”, while Iran’s president also signalled a willingness to de-escalate.
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“We possess the necessary will to end this conflict, provided that essential conditions are met, especially the guarantees required to prevent repetition of the aggression,” Iranian President Pezeshkian said, according to Euronews.
Hopes of a de-escalation in the Middle East have reduced demand for the dollar as a safe haven. However, downside pressure on the US currency is expected to remain limited, as higher oil prices could deter Federal Reserve officials from easing monetary policy.
Read more: Stocks rally after Trump says US could leave Iran in a few weeks
In equities, the FTSE 100 (^FTSE) was higher on Wednesday morning, up 1.3% to trade at 10,313 points at the time of writing. For more details on market movements, check our live coverage here.
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