FX.co ★ Sterling Steady as Political Scandal and Middle East Tensions Weigh

The pound hovered near $1.35, just below last week’s three-week high, as markets contended with mounting political uncertainty and escalating geopolitical tensions. Olly Robbins, the former Foreign Office chief removed by Prime Minister Keir Starmer over the Peter Mandelson ambassadorship controversy, stated in testimony that although he faced pressure to approve Mandelson’s appointment, there was no direct contact with No. 10 during the vetting process. At the same time, Iran denied sending a delegation to Pakistan for talks with the United States, while President Trump accused Tehran of repeated ceasefire violations, further heightening tensions. On the economic front, UK labor market data pointed to moderating wage growth, an unexpected fall in unemployment, and a decline in job vacancies. However, the release had limited impact on markets, as it reflects pre-war conditions and does not yet capture the current state of the labor market.