The British pound is currently trading near a 7-month high, around $1.332, benefiting from improved investor sentiment driven by easing US-China trade tensions. This positive sentiment has reduced the demand for safe-haven assets and supported the pound’s rise, even though economists are warning that the trade war is negatively impacting both the US and UK economies. The UK’s economic data calendar for the week is light.
- The British pound is trading near a 7-month high of $1.338, currently at $1.332.
- Easing US-China trade tensions are boosting investor sentiment and reducing demand for safe-haven assets.
- US President Trump has mentioned ongoing tariff talks with China, suggesting a potential de-escalation of the trade war.
- The EY Item Club forecasts a slowdown in UK economic growth due to Trump’s tariffs.
- The 2025 GDP growth projection has been lowered to 0.8% from 1%, and the 2026 forecast is cut to 0.9%.
- The slowdown is attributed to the global tariff war’s impact on consumer spending and business investment.
- The UK’s data calendar is light this week, with only the Nationwide House Price Index and Bank of England’s money and credit indicators scheduled for release.
The positive momentum of the British pound appears somewhat disconnected from underlying economic concerns. While global factors, specifically a perceived easing of trade tensions, are providing a lift, the long-term outlook suggests potential headwinds. Investors should be aware that while short-term gains are possible, forecasts indicate slower economic growth in the UK, potentially impacting the pound’s value further out. The relatively quiet data calendar in the UK this week may mean external factors will have a greater influence on its performance.