GBP/USD Under Pressure as UK Political Risks and Stronger Dollar Weigh on Sterling

GBP/USD is under pressure as political uncertainty in the UK combines with renewed US dollar strength. Growing pressure on Prime Minister Keir Starmer after Labour’s local election losses is increasing concerns about political stability, fiscal direction, and future UK policy.

At the same time, the US dollar is gaining support from safe-haven demand as US-Iran tensions rise again and negotiations remain stalled. Higher oil prices and stronger US payroll data are also reinforcing expectations that the Federal Reserve could keep interest rates higher for longer, supporting Treasury yields and the dollar.

Technically, GBP/USD opened the week with a downside gap before recovering most of those losses. The pair still holds above key trend support after recovering from the 1.32 area, but buyers need a break above 1.3650 to strengthen bullish momentum toward 1.37. On the downside, a break below 1.3548 could expose 1.3450 and shift momentum back toward sellers.

Bottom line: GBP/USD remains caught between UK political uncertainty and stronger US dollar demand, with price action around 1.3550–1.36 likely deciding the next move.

GBP/USD Daily Chart