GBP today: As the White House deadline approaches, the dollar's strength is pressuring the pound.

Investing.com - The pound weakens on Tuesday, hovering around $1.3234 as of 03:50 a.m. ET, as the dollar remains firm ahead of a White House deadline tied to U.S.-Iran conflict.

The pullback continues the recent downtrend, with the pound/dollar pair hitting a low of $1.3211 during the session. The 52-week low for this currency pair is $1.2721.

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The dollar is supported by geopolitical uncertainty, as investors wait for clear signals on whether a ceasefire agreement can be reached. If an agreement is not reached, it could trigger military action by the U.S. and Israel against Iran’s civilian infrastructure, increasing the risk of retaliatory strikes against the Gulf region.

High energy prices remain a key channel supporting the dollar. ING strategists, led by Chris Turner, said that if tensions escalate, further increases in oil and natural gas prices would be a “clear positive for the dollar.”

Domestic data also supports the dollar. The March jobs report released last Friday beat expectations, while markets currently expect the Federal Reserve’s policy path this year to be broadly unchanged, in contrast to expectations for rate hikes of two to three times among major economies.

ING says stronger economic activity data and rising energy costs could prompt markets to shift toward pricing tighter Fed policy. Investors will watch for direction from the minutes of the March 18 Federal Open Market Committee meeting to be released on Wednesday and the March consumer price index (CPI) data to be published on Friday.

U.S. overall inflation is expected to rise from 2.4% year over year to 3.4%. Comments from John Williams, president of the New York Fed, are typically seen as dovish, and the market will closely monitor whether his tone shows any change.

ING expects the U.S. dollar index (DXY) to find support in the 100-100.50 range.

Meanwhile, the euro continues to face pressure, with EUR/USD at $1.1544, capped within the $1.1420-1.1640 range. Market expectations for an ECB rate hike in April have eased to slightly below 50%, though tightening of about 75 basis points is still expected for the full year.

ING warns that if the ECB skips the April rate hike amid high energy prices, the euro could weaken further.

In Central and Eastern Europe, markets are tracking the global trend. Czech March inflation is expected to rise due to higher fuel costs, while Romania’s central bank is expected to keep interest rates unchanged at 6.50%, despite inflation reaching double digits. Poland’s central bank also expects to keep rates unchanged at 3.75%, with policy guidance later this week set to be the focus.

In Asia-Pacific, the Reserve Bank of New Zealand is widely expected to hold interest rates steady at 2.25% on Wednesday.

This year, the New Zealand dollar has lagged the Australian dollar, and unless there is a hawkish surprise, this trend may continue.

Due to holiday scheduling, weaker liquidity later this week could amplify market volatility related to geopolitical developments.

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