Sterling was muted against the dollar on Monday ahead of a Bank of England meeting this week, with markets adopting a wait-and-see approach to rising geopolitical uncertainty, as a conflict between Israel and Iran showed no sign of abating.
Sterling was marginally up against the dollar at $1.359, after falling as much as 0.7% to a low of $1.3518 on Friday, when investors scurried into the relative safety of the greenback after Israel launched a flurry of strikes on Iran.
“The pound is trading largely in line with its relative sensitivity to risk, so a little bit more risk sensitive than the euro,” noted Nick Rees, head of macro research at Monex Europe.
The euro rose 0.18% against the pound to 85.26 pence.