FX.co ★ Sterling Weakens Further on Monday

The British pound eased to about $1.3503, pressured primarily by a stronger US dollar as investors rotated into safe-haven assets amid renewed tensions between Washington and Tehran. Oil and gas prices surged after the US Navy seized an Iranian vessel, prompting Iran to fire on ships and once again close the Strait of Hormuz, reversing earlier expectations that it would reopen. Brent and WTI futures rallied roughly 6%, erasing much of Friday’s losses. In rates markets, traders have added around six basis points to expectations for Bank of England hikes this year, although only a single increase is fully priced in. Political uncertainty is also dampening sentiment as scrutiny mounts over Prime Minister Keir Starmer’s decision to appoint Peter Mandelson as US ambassador, with Starmer due to address parliament and further testimony expected from officials involved in the vetting process.