FX.co ★ Pound Slips Below $1.35 Despite Broader Dollar Weakness

The British pound slipped below $1.35, underperforming even as the US dollar weakened broadly. Risk sentiment improved after oil prices declined on hopes of a US–Iran agreement to reopen the Strait of Hormuz, easing concerns about inflation and the likelihood of higher interest rates. Crude prices faced additional downward pressure after President Donald Trump said talks with Tehran would resume on Monday, reducing fears of a further escalation in the conflict. At the same time, last week’s Bank of England policy meeting reinforced expectations that policymakers are in no hurry to tighten monetary policy, leading markets to scale back expectations for interest rate increases in 2026.