United Kingdom: Sterling Holds Near $1.34 Amid Geopolitical Tensions.

The British pound stabilized just under $1.34 as investors monitored the increasingly fragile US-Iran ceasefire. Tensions surged after Israel launched its most severe airstrikes on Lebanon yet, causing hundreds of casualties and provoking Iranian threats of retaliation. Tehran ruled out further peace negotiations with the US, while the ongoing blockade of the Strait of Hormuz intensified pressure on the already shaky truce, driving oil prices upward. Compounding the uncertainty, US President Donald Trump announced that US forces would remain deployed near Iran until a “real agreement” is reached. Amid these developments, financial markets are anticipating a greater chance of further interest rate hikes by the Bank of England, with at least one increase projected by the end of 2026.