FX.co ★ Sterling Hits Two-Week High

The pound rose to $1.33, a two-week high against the dollar, as investors moved into riskier assets on signs of progress in indirect US-Iran negotiations. Sterling also reached a one-year high against the euro, supported by broad euro weakness after eurozone inflation data came in softer than expected. Qatar said the next US-Iran meeting would be arranged as soon as possible, while oil prices extended their decline as more shipments passed through the Strait of Hormuz. Investors also weighed comments from central bankers at the ECB’s Sintra Forum. Bank of England Governor Bailey maintained a dovish tone, highlighting signs of a slowing UK economy but ruling out imminent rate cuts amid persistent inflation risks. Meanwhile, Fed Chair Warsh acknowledged that inflation expectations had eased in recent weeks, while reiterating the Fed’s commitment to returning inflation to target. UK political developments are seen as unlikely to affect sterling in the near term, with any impact expected only from late July, when Andy Burnham is due to become Prime Minister.