The pound fell sharply on Monday as investors turned to the U.S. dollar as a safe-haven asset. Markets are moving away from currencies of countries most vulnerable to rising energy costs after the U.S.–Iran war pushed oil prices toward $120 per barrel.

Oil prices jumped more than 25% on Monday, reaching their highest levels since mid-2022.

The dollar has also been supported by the United States’ status as one of the world’s leading oil and gas producers. In contrast, Britain and the euro zone remain heavily dependent on energy imports.

Despite this pressure, the GBP/USD pair has so far managed to hold within the 1.3280–1.3380 range.