Pound Sterling gives back gains against US Dollar as Iran denies ceasefire proposal

• The Pound Sterling gives up its early gains against the US Dollar as the market mood turns risk-off.
• Iran rejects the US temporary ceasefire proposal and wants a permanent one.
• Investors await US President Trump’s response after the Tuesday deadline.

The Pound Sterling (GBP) surrenders its early gains against the US Dollar (USD) and flattens around 1.3240 during the European trading session on Tuesday. The GBP/USD pair falls back as the market sentiment turns risk-averse, following Iran’s denial of a temporary ceasefire to the United States (US).

During the press time, S&P 500 futures trade 0.35% lower below 6,600, reflecting a risk-off market mood. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, claws back its losses and flattens around 100.00.

In the European trade, a senior Iranian official stated that Tehran rejects temporary ceasefire, and wants a permanent one in return of the Strait of Hormuz reopening along with the guarantee of no repetitive aggression, and compensation for damages.

Meanwhile, investors await US President Donald Trump’s response to Iran’s denial of Hormuz reopening ahead of his proposed deadline, which is Tuesday, 08:00 PM ET.

Over the weekend, US President Trump warned of obliterating Iranian civilian infrastructure if it doesn’t reopen the Strait of Hormuz. On Monday, Trump stated that Iran should consider this as the “final deadline”, and reiterated threats of attacking its power plants and bridges.

On the monetary policy front, investors await Federal Reserve (Fed) Open Market Committee (FOMC) minutes of the March policy meeting, which will be released on Wednesday. In the policy meeting, the Fed left interest rates unchanged in the range of 3.50%-3.75% and stated that the policy is not based on a preset approach.