The pound slipped after tensions between the US and Iran rose sharply over the weekend, raising the prospect that a two-week ceasefire might collapse and pushing investors towards the safe-haven US dollar, Reuters reports.
The pound was last down 0.1 per cent at $1.3503 as the dollar rose. The euro was 0.1pc higher against the pound at 87.10 pence.
The US currency rose as stocks fell and oil prices climbed after Iran said it would not participate in a second round of negotiations.
