Market conditions indicate the British pound weakened against the dollar, reaching its lowest level since April 11. The dollar’s strength was fueled by positive news regarding US-China trade relations. The Bank of England also cut the Bank Rate.
- The British pound weakened to around $1.3, a low not seen since April 11.
- The dollar strengthened due to the US and China agreeing to tariff reductions. The US will cut tariffs on Chinese goods from 145% to 30% for 90 days, while China will lower tariffs on US imports from 125% to 10%.
- President Trump and Prime Minister Starmer finalized a deal to eliminate UK non-tariff barriers, fast-track US goods through customs, and protect Britain’s car and steel sectors.
- The UK also reached a trade agreement with India and is preparing for negotiations with the EU.
- The Bank of England narrowly voted to cut the Bank Rate by 25 bps to 4.25%, its lowest level in two years, citing disinflation progress while acknowledging balanced inflation risks.
The British Pound faces downward pressure due to a strengthening dollar and a recent interest rate cut by the Bank of England. However, new trade agreements with the US and India, along with upcoming negotiations with the EU, offer potential for future economic gains that could bolster the pound’s value.