Why did the dollar strengthen while the pound weakened on Monday, according to the news?

The dollar strengthened due to rising geopolitical uncertainty around a fragile U.S.-Iran peace deal—specifically, threats from Donald Trump to restart Middle East hostilities and Iran's announcement that it had closed the Strait of Hormuz, which disrupted shipping flows and lifted oil prices; meanwhile, the pound weakened by 0.24% to $1.32055 amid political uncertainty in Britain following Andy Burnham's decisive parliamentary election victory, prompting speculation about Prime Minister Keir Starmer's political future and concerns over potential fiscal rule loosening that could negatively impact UK bond markets and the currency.

What are the key drivers behind the Japanese yen’s decline to near a two-year low, as reported in the article?

The yen slipped to 161.53 per dollar—near a two-year low—due to a hawkish Federal Reserve stance that has led traders to increase bets on U.S. rate hikes, erasing earlier gains from April 30 interventions; Japanese Finance Minister Satsuki Katayama reiterated authorities’ readiness to respond to currency moves, but analysts noted that intervention may be ineffective and costly against strong U.S. fundamentals and Fed policy, leaving the MOF seemingly powerless to halt the yen’s depreciation.

Dollar Firms as Cracks Emerge in Peace Deal, Pound Dips on Starmer Uncertainty

Jun 21, 2026

The dollar strengthened amid Middle East tensions threatening the Strait of Hormuz, pushing Brent crude up 1.3%, while the pound fell due to UK political uncertainty surrounding Prime Minister Keir Starmer.

reuters

2026-06-21

Dollar Firms as Cracks Emerge in Peace Deal, Pound Dips on Starmer Uncertainty

Dollar Firms as Cracks Emerge in Peace Deal, Pound Dips on Starmer Uncertainty

FAQ