The pound-euro (GBP/EUR) exchange rate is rising for a third straight day.
Sterling is strengthening as markets welcome the US-Iran ceasefire, which has sharply reduced geopolitical risk and pushed oil prices around 15% lower, back below $100 a barrel.
This has improved investor sentiment and eased immediate stagflation concerns, helping support the pound against both the euro and the dollar.
The euro is also benefiting from the prospect of lower energy costs, given the eurozone’s reliance on imported fuel, rising against the dollar.
If oil remains contained, markets may begin to reassess the need for further rate hikes from both the ECB and the Bank of England.