The British pound strengthened toward $1.35, supported by optimism over a potential ceasefire in the Middle East. An agreement between Israel and Lebanon to suspend hostilities lifted hopes for a broader de-escalation in tensions involving the US, Israel, and Iran, even as Tehran denied any progress in talks with Washington and fighting persisted in Lebanon. At the same time, the Republican-controlled US House of Representatives voted to block military action against Iran, in open defiance of President Trump’s administration. On the monetary policy front, markets are now pricing in nearly two Bank of England interest rate increases this year, with the first move anticipated in September, as policymakers weigh mounting inflation pressures against early signs of a cooling labor market.