Pound Tumbles as Dollar Gains from Lingering Rate Hike Expectations

The British pound has fallen to its lowest level in nearly a month, dropping below $1.33 as investors await developments in the Middle East.

Despite a pause in US attacks on Iran leading to lower oil prices and eased inflation concerns, the US dollar has gained support from lingering expectations that the Federal Reserve could still raise interest rates this week.

The recent inflation data released in June showed annual consumer price growth slowing to 2.6%, a 15-month low, reinforcing market expectations that the Bank of England's policy decision will keep interest rates unchanged at 3.75%.