The Rupee fell to its weakest in a month, while the cost of hedging against further depreciation against the dollar rose, as the escalating military conflict in the Middle East kept financial markets across the globe on edge. For energy-importers such as India, the near 10% surge in crude oil prices to $80 per barrel as container ships cluster on either side of key chokepoint the Strait of Hormuz is the immediate economic threat. Dollar-rupee forward premiums, which reflect the cost of hedging against further rupee weakness, jumped on Monday with the 1-year implied yield climbing as much as 13 bps to 2.80%. Asian currencies fell between 0.3% to 1.3%, while the dollar index was up 0.3% at 98.4. Traders in India's foreign exchange market struck a cautious note on initiating speculative wagers on the rupee, given the heightened risk of overnight developments that could squeeze such positions. Sterling hit a 2-1/2-month low against the dollar and edged down versus the euro on Monday, as the Iran conflict sent investors into safe-haven assets while concerns over the Bank of England’s policy path weighed on the British currency. The dollar rose as the Iran conflict fuelled safe-haven demand, and higher oil prices. Sterling fell 0.68% to $1.3393, after reaching $1.3315, its lowest level since December 17. As well as events in the Middle East, sterling is being affected by domestic politics after a local election in northern England brought a resounding defeat for Prime Minister Keir Starmer's Labour party, raising speculation that the government could move further to the left and increase government spending. Barclays strategists argued that the growing influence of Labour’s soft-left faction could justify expectations for more fiscal spending and a higher premium in the pound. At about 0.88 in the euro/pound cross that premium has grown to around 2%, Barclays estimated. It could widen further in the near-term depending on political developments. The euro was up 0.05% at 87.68 pence . Strategists argued that short-dated gilt yields close to multi-year lows are consistent with the broader data trajectory and a dovish shift at the Bank of England, reinforcing expectations of sterling underperformance. The ?euro and yen fell on Monday as concerns about higher oil prices dented the currencies ?of countries most exposed to energy shortages, while the dollar also benefited from a safe-haven bid on concerns about conflict in the Middle East widening. Oil and gas prices surged, the dollar gained and stock indexes fell around ?the world while safe-haven gold rallied on Monday as the U.S.-Israeli air war against Iran widened and looked set to last for weeks, ?threatening to upend a global economic recovery and perhaps reignite inflation. U.S. crude rose 6.86% to $71.62 a barrel and Brent rose to $78.74 per barrel, up 8.07% on the day as ?investors worried about how long the war would last and disrupt energy markets.......