Pound falls as Iran rejects additional peace talks with US

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Your help makes all of the distinction. Learn extra The pound skilled a dip on Monday as escalating tensions between the US and Iran over the weekend prompted traders to hunt the security of the US greenback.

The foreign money's slide additionally coincided with rising political strain on Prime Minister Sir Keir Starmer, who's dealing with requires his resignation after it emerged former US ambassador Peter Mandelson had failed a vetting course of.

The pound was final down 0.1 per cent towards the greenback, buying and selling at $1.3503, whereas the euro gained 0.1 per cent towards sterling, reaching 87.10 pence.

The greenback strengthened as international shares fell and oil costs climbed, following Iran's announcement that it could not take part in a second spherical of peace talks.

Tensions have been additional infected after the US reported seizing an Iranian cargo ship trying to breach its blockade of the Strait of Hormuz.

<img src="https://static.independent.co.uk/2026/04/20/00/da202ed93ac692c3431d21bbc8cee850Y29udGVudHNlYXJjaGFwaSwxNzc2NjkyNDkz-2.84300316.jpg" srcset="https://static.independent.co.uk/2026/04/20/00/da202ed93ac692c3431d21bbc8cee850Y29udGVudHNlYXJjaGFwaSwxNzc2NjkyNDkz-2.84300316.jpg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2026/04/20/00/da202ed93ac692c3431d21bbc8cee850Y29udGVudHNlYXJjaGFwaSwxNzc2NjkyNDkz-2.84300316.jpg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="Prime Minister Sir Keir Starmer is set to face scrutiny from MPs on Monday (Tom Nicholson/PA)" class="sc-1mc30lb-0 ggpMaE inline-gallery-btn"/> Prime Minister Sir Keir Starmer is about to face scrutiny from MPs on Monday (Tom Nicholson/PA) (PA Wire) Susannah Streeter, chief funding strategist at Wealth Membership, commented: "Contemporary worries are percolating in regards to the fragility of the Iran ceasefire, sending oil costs larger and preserving traders on edge."

Domestically, Prime Minister Starmer is beneath scrutiny forward of a parliamentary handle, as a scandal unfolds concerning Mandelson, whose proposed appointment because the UK's ambassador to the US failed a vetting course of. The controversy is linked to Mr Mandelson's previous associations with convicted paedophile Jeffrey Epstein.

The Guardian reported final Thursday that Mandelson had failed a safety vetting, intensifying strain on Starmer.

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Chris Turner, international head of markets at ING, famous: "This will probably be a troublesome session for PM Starmer and one which is able to lengthen into tomorrow, when the highest civil servant concerned within the approval course of additionally seems at a parliamentary listening to."

He added: "GBP/USD may nicely hand again an enormous chunk of current good points this week."

Regardless of Monday's slip, the pound stays near Friday's two-month excessive of $1.3599, reflecting some market optimism that the worst of the Iran battle could also be over.

Sterling has seen a 2 per cent rise this month, following a 1.9 per cent decline in April, pushed by hopes of a ceasefire deal.

Nonetheless, some traders worry {that a} potential alternative for Starmer may lead Labour insurance policies additional to the left, probably growing authorities borrowing.