Sterling Nears Two-Month High Amid US-Iran Deal Optimism

2026-05-06 06:07 By Joana Ferreira 1 min. read

The British pound climbed toward $1.36, approaching last week’s two-month peak of $1.366, as optimism grew over a potential US-Iran agreement.

US President Donald Trump announced a pause in "Project Freedom," the operation guiding ships through the Strait of Hormuz, citing "great progress" in mediated talks with Iran.

However, he emphasized that the US blockade of ships to and from Iranian ports would "remain in full force and effect," leaving uncertainty over the Strait’s future.

Meanwhile, investors focused on Britain’s municipal elections on Thursday, with polls suggesting Prime Minister Keir Starmer’s Labour Party might face a significant setback.

Markets are pricing in at least two quarter-point rate hikes from the Bank of England this year, with Governor Andrew Bailey describing the recent hold as a "difficult judgement call," warning that waiting for clearer inflationary pressures could risk a delayed response.



News Stream
Sterling Nears Two-Month High Amid US-Iran Deal Optimism
The British pound climbed toward $1.36, approaching last week’s two-month peak of $1.366, as optimism grew over a potential US-Iran agreement. US President Donald Trump announced a pause in "Project Freedom," the operation guiding ships through the Strait of Hormuz, citing "great progress" in mediated talks with Iran. However, he emphasized that the US blockade of ships to and from Iranian ports would "remain in full force and effect," leaving uncertainty over the Strait’s future. Meanwhile, investors focused on Britain’s municipal elections on Thursday, with polls suggesting Prime Minister Keir Starmer’s Labour Party might face a significant setback. Markets are pricing in at least two quarter-point rate hikes from the Bank of England this year, with Governor Andrew Bailey describing the recent hold as a "difficult judgement call," warning that waiting for clearer inflationary pressures could risk a delayed response.
2026-05-06
Pound Dips Amid Political and Geopolitical Uncertainty
The pound traded slightly above $1.35, retreating from last week’s two-month high of $1.366, as investors turned their attention to Britain’s municipal elections on Thursday, with polls indicating Prime Minister Keir Starmer’s Labour Party could suffer a notable setback. Meanwhile, oil prices remained near four-year highs amid ongoing Middle East tensions, with the US and Iran locked in a dispute over control of the Strait of Hormuz. Markets are pricing in nearly three quarter-point rate hikes from the Bank of England this year. Yet, uncertainty persists after the BoE kept rates unchanged, citing the broad economic fallout from the Iran conflict. Governor Andrew Bailey called the decision a "difficult judgement call," cautioning that delaying action until inflationary pressures are evident could lead to a late response.
2026-05-05
Pound Near Two-Month High
The pound traded just below $1.36, close to a two-month peak of $1.366 reached last week, as investors focused on Britain’s municipal elections on Thursday, with polls suggesting Prime Minister Keir Starmer’s Labour Party may face a significant setback. Meanwhile, oil prices continued to rise following reports that two Iranian missiles struck a US warship after it ignored warnings as it attempted to pass through the Strait of Hormuz. Markets see a roughly 50% chance of a Bank of England rate hike in June and expect two 25bp increases by September. However, uncertainty remains high after the BoE held rates steady while acknowledging a wide range of economic impacts from the Iran war. Governor Andrew Bailey described the decision as a "difficult judgement call," warning that waiting for clear evidence of inflationary pressures could risk a delayed response.
2026-05-04