Pound Pulls Back from Four-Week Rally Amid Iran Sanctions Concerns

The British pound experienced a slight dip on Monday, pulling back from a four-week rally as investors grew cautious ahead of potential US sanctions on Iran and its trading partners.

The sterling dipped nearly 0.1% to $1.3633 by 0956 GMT, after reaching a six-month high of $1.3675 on Friday.

This dip comes despite the pound being one of the best-performing currencies among Group of Seven peers this year, largely due to market expectations that the Bank of England will hike interest rates towards the end of the year in response to better-than-expected economic resilience.

Traders see benchmark interest rates rising by at least 25 basis points by December, although most economists anticipate no change. This shift could weigh on the currency.