FX.co ★ British Pound Close to 6-Month High

The British pound remained steady around $1.30, close to the six-month high achieved the previous week. This stability is attributed to the widespread weakness of the US dollar in response to intensifying trade tensions. On Friday, China announced retaliatory actions, imposing 34% tariffs on a broad array of American goods. Concurrently, President Donald Trump dismissed concerns about inflation and potential recessionary impacts. In the UK, Prime Minister Keir Starmer emphasized his commitment to insulating Britain from the repercussions of Trump’s escalating trade disputes. Simultaneously, growing apprehensions about a global economic downturn have prompted investors to bolster their expectations for interest rate cuts. Market forecasts now anticipate approximately 85 basis points in rate reductions from the Bank of England within this year, an increase from the 52 basis points expected before the latest US tariff measures were announced. A rate cut in May is now considered fully anticipated by the markets.