The Pound Sterling (GBP) has appreciated against the US Dollar (USD), reaching approximately 1.3150, driven by concerns regarding the US economic outlook amidst ongoing trade tensions between the United States and China. China’s recent increase in counter-tariffs on US goods to 125% has further weakened the USD. Market participants are closely monitoring upcoming UK employment and inflation data. The GBP/USD pair is approaching its six-month high of 1.3207, reflecting investor sentiment influenced by the US-China tariff dispute. The US Dollar Index (DXY) has declined to approximately 99.00, a three-year low. While President Trump’s temporary suspension of reciprocal tariffs initially mitigated recessionary fears, the exclusion of China has maintained pressure on the USD. Despite the US administration’s objective to incentivize domestic manufacturing, businesses remain hesitant due to concerns about potential future reductions in import duties following trade agreements.
