GBP/USD Hits Three-Week High at 1.3417 on BoE Rate Hike Bets

GBP/USD traded at 1.3417 after briefly reaching a three-week high, gaining 0.5% on the week despite Middle East tensions lifting safe-haven demand for the dollar. Sterling strength stems from fading UK political risk and rising expectations that the Bank of England may hike rates if higher oil prices sustain inflation. The dollar struggled to hold gains as risk appetite improved and Fed minutes offered little new guidance. Attention now turns to Thursday’s UK GDP release and Tuesday’s US CPI data, which could determine the next directional move for the pair.