FX.co ★ Sterling Hits Over 1-Month Low

Sterling fell to around $1.34 in early March, its weakest level since January 2026, as a resurgent US dollar drew safe-haven inflows amid escalating tensions in the Middle East. The US and Israel launched coordinated strikes on Iran over the weekend, reportedly killing Iran’s Supreme Leader, Ayatollah Ali Khamenei, and prompting Tehran to retaliate with attacks on US assets in neighboring countries. Downward pressure on the pound was further intensified by rising domestic political uncertainty after Labour’s shock loss in Gorton and Denton, a constituency it had comfortably held in the 2024 general election. The upset has fueled doubts over the future of Prime Minister Starmer and Chancellor Rachel Reeves, amid concerns they could be replaced by ministers favoring higher fiscal spending, potentially exacerbating strains on the UK’s public finances. Investors are now looking ahead to a fresh slate of domestic indicators due this week, including house prices, BoE consumer credit data, mortgage approvals, the Halifax House Price Index, and PMI releases.