Pound Holds Firm as US Sanctions on Iran Loom

The British pound is trading near 1.36351 against the U.S. dollar, nearly flat on the day, extending its recent firm consolidation pattern. Market attention is focused on upcoming remarks by U.S. Treasury Secretary Scott Bessent on Iran sanctions, as well as speeches by Federal Reserve officials at the Kansas City Fed's Jackson Hole symposium, with both events set to provide fresh directional cues for the currency market.

**Geopolitical and Sanctions Risks in Focus**

The U.S. Treasury has previously announced a new round of sanctions on Iran, targeting a Dubai-based Iranian banker and 13 other individuals and entities. Meanwhile, Iran has warned that it is prepared for "full defense" if the U.S. abandons the previously reached memorandum of understanding. This tense dynamic of mutual pressure has weakened the dollar's safe-haven appeal, providing indirect support for the pound. Market reports indicate that the pound earlier rose above $1.36, reaching its highest level since mid-February.

**Deal Hopes and Multilateral Mediation**

Despite the current tensions, multiple parties are pushing for the U.S. and Iran to return to negotiations. Reports suggest that Pakistan, Qatar, and Egypt are intensifying mediation efforts. Earlier, the pound had received a significant boost from optimism over a U.S.-Iran agreement to end hostilities. The UK, France, Germany, and Italy issued a joint statement following the announcement of the deal, calling for its "swift and full" implementation and stressing the urgency of restoring freedom of navigation in the Strait of Hormuz. UK Prime Minister Keir Starmer also welcomed the agreement, calling it "a major step toward ending the war."

**Central Bank Officials' Remarks in Focus Ahead**

Beyond geopolitical factors, the latest comments from Federal Reserve officials at the Jackson Hole symposium are also moving market nerves. Any hints about the future path of monetary policy could trigger volatility in the dollar, thereby influencing the short-term direction of the pound against the dollar. Traders are seeking clues from these speeches on the Fed's next moves.