Sterling Rallies as US-Iran Tensions Ease, BoE Rates Held Firm

Sterling rose 0.15% against the US dollar in Monday's European session as investors became more optimistic about diplomacy between the US and Iran.

The move followed a statement from the US military that further strikes on Iran were unnecessary because targets had been exhausted, causing the US Dollar Index (DXY) to dip 0.25% to around 101.20.

GBP/USD pushed higher in response, reaching around 1.3345. The UK currency's gain was not entirely unexpected, as Bloomberg and UOB called for the Bank of England to hold rates at 3.75%, citing softer demand and a loosening labour market as factors against further tightening.