FX.co ★ Pound Steadies Near Two-Week Low on US-Iran Tensions, UK PMI

The British pound pared early losses to steady around $1.35 against the US dollar, though it remained at its weakest level since April 10. Markets weighed escalating US-Iran tensions — with peace talks stalled and both sides entrenched over control of the Strait of Hormuz — against stronger-than-expected UK PMI data. President Trump has extended the April 7 truce indefinitely while awaiting a new proposal from Tehran, but Iranian officials have indicated there are no immediate plans to return to negotiations. On the economic front, April’s PMI showed a rebound in UK business activity after March’s war-induced slowdown, though the improvement partly reflects firms stockpiling inputs amid concerns over potential price surges and supply disruptions. Politically, Keir Starmer’s former chief of staff, Morgan McSweeney, is due to appear before the Foreign Affairs Committee next Tuesday over vetting allegations linked to Peter Mandelson, while Labour MP Jonathan Brash has said that, given the fallout from the scandal, Starmer’s resignation is now unavoidable.