Pound Sinks Below $1.35 Amid US-Iran Diplomatic Progress

The British pound weakened to trade below $1.35, underperforming even as the US dollar experienced broad weakness.

Investor sentiment improved after oil prices fell due to hopes of a US-Iran agreement to reopen the Strait of Hormuz, easing concerns over inflation and higher interest rates.

Crude prices also came under pressure after President Donald Trump announced negotiations with Tehran would resume on Monday, reducing fears of further conflict escalation.

The recent Bank of England policy meeting reinforced expectations that policymakers are in no rush to tighten monetary policy, prompting markets to scale back bets on interest rate hikes in 2026.