FX.co ★ Sterling Holds Close to 7-Month High

The British pound is currently trading at approximately $1.332, nearing a seven-month peak of $1.338. This rise can be attributed to improved investor sentiment following the easing of US-China trade tensions, which has simultaneously decreased the appeal of safe-haven assets. US President Trump has indicated ongoing discussions on tariffs with China, hinting at a possible reduction in trade hostilities, a factor that had previously fueled fears of an economic recession. Nonetheless, economists caution that the US economy is showing signs of weakening owing to the trade conflict, as evidenced by decreased trade and diminished business activities. In the United Kingdom, the EY Item Club has revised its economic forecasts, predicting a slowdown in growth due to the impact of Trump's tariffs. The growth projection for 2025's GDP has been adjusted downward to 0.8% from the previous 1%, while the estimate for 2026 has been reduced to 0.9%. This anticipated slowdown is linked to the adverse effects of the global tariff war on consumer spending and business investment. This week, the UK's economic data schedule is relatively light, featuring only the Nationwide House Price Index and the Bank of England’s money and credit indicators.