The British pound edged lower to trade below $1.35, underperforming even as the US dollar weakened broadly. Investor sentiment improved after oil prices fell on hopes of a US-Iran agreement to reopen the Strait of Hormuz, easing concerns over inflation and the prospect of higher interest rates. Crude prices also came under pressure after President Donald Trump said negotiations with Tehran would resume on Monday, reducing fears of further escalation in the conflict. Meanwhile, last week's Bank of England policy meeting reinforced expectations that policymakers are in no rush to tighten monetary policy, prompting markets to scale back bets on interest rate hikes in 2026.