FX.co ★ Sterling Gains on Iran Deal Optimism

The pound advanced toward $1.35, its highest level since May 13, as investors responded positively to progress in US-Iran negotiations and pared back expectations for Bank of England rate hikes following a string of weak UK data. Brent crude slipped below $100 per barrel after US President Donald Trump said a memorandum of understanding between the two countries had been "largely negotiated" and would allow the reopening of the Strait of Hormuz. A 1.3% drop in April retail sales, softer inflation, an unexpectedly cooling labor market, and May PMI data indicating the first contraction in private-sector activity in a year all contributed to the reassessment of rate prospects. Markets now turn their attention to upcoming speeches by BoE policymakers for further monetary policy signals, as well as to political developments involving Prime Minister Keir Starmer after Labour’s regional election setbacks this month.