The British Pound fell to $1.244, retreating from a three-week high, following comments by U.S. President Donald Trump about imposing broader tariffs.
Sterling falls from three-week high
Trump’s statements, which suggested targeting key sectors such as semiconductors, pharmaceuticals, and steel, stoked fears of escalating trade tensions, particularly with Canada and Mexico. This drove a rally in the U.S. dollar as investors sought safer assets amid uncertainty.
At the same time, market attention shifted to central bank policy decisions. The Federal Reserve is widely expected to hold interest rates steady, while the European Central Bank is anticipated to implement a 25-basis-point rate cut to support the eurozone economy.
Expectations on next BoE's move
In the UK, despite the release of stronger-than-expected PMI data signaling resilience in the private sector, the Bank of England is expected to cut rates in February, as policymakers focus on stimulating growth amid lingering concerns over inflation and subdued consumer demand. These diverging monetary policy trajectories, combined with heightened trade tensions, contributed to the pound's weakness against the dollar.
