Pound Hits Over Two-Month High Amid US-Iran Deal Hopes

2026-05-06 11:20 By Joana Ferreira 1 min. read

The British pound climbed above $1.36, reaching its strongest level since mid-February, as the US dollar’s safe-haven appeal faded amid growing optimism over a potential US-Iran agreement.

According to Axios, the White House is close to a one-page Memorandum of Understanding with Iran to end the conflict and begin nuclear negotiations, the closest the parties have been to a deal since the conflict started.

Tehran is expected to respond within 48 hours, though no agreement is finalized.

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

On monetary policy, financial markets now price in about 50 basis points of tightening, equivalent to two rate hikes, by year-end, down from up to three hikes priced in earlier this month.



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