Pound Hits One-Month Low Amid Oil Price Surge and Rate Hike Bets

The pound fell to its lowest level in over a month as investors sought safe-haven assets following a surge in oil prices. Sterling dropped to $1.3474, its lowest since August 7, and was last down 0.4%.

The rally in the dollar was driven by concerns about energy supplies after Houthi strikes on Saudi Arabia's main pipeline, which is crucial for bypassing the Strait of Hormuz. Brent crude prices jumped 3% to $108 a barrel.

Rising bets on a Federal Reserve rate hike this week also supported the U.S. dollar, while the European Central Bank's recent rate increase added to the upward momentum. The Bank of England is expected to keep rates steady on Thursday but traders now predict an interest rate rise later this year and more in 2027.