The pound climbed back to $1.34 on Monday, rebounding after a turbulent week that saw sterling drop over 2%, its steepest weekly fall since November 2024. This followed reports that the US proposed a temporary waiver on Iran oil sanctions, with Tehran open to a long-term nuclear freeze but not a full dismantlement of its atomic program. Despite the recovery, sterling remains under pressure due to political uncertainty, as investors assess the possibility of Andy Burnham, seen as the least market-friendly candidate for bond investors, entering the leadership race to challenge Prime Minister Keir Starmer. Markets are pricing in nearly three Bank of England rate hikes this year.