FX.co ★ Sterling Weakens to 5-Week Low as Market Fears Global Recession

The British pound depreciated to $1.28, marking its lowest point since March 4, as investors hesitated to engage with higher-risk assets due to concerns that U.S. President Donald Trump's trade strategies might instigate a global economic downturn. Recently, China announced retaliatory tariffs of 34% on a wide array of American products, while President Trump minimized the perceived threats of inflation and the possibility of a recession. Consequently, investor anticipation for interest rate reductions by the Bank of England has intensified. Financial markets are now anticipating approximately 88 basis points of cuts to the BoE's key interest rate by the end of December, a significant increase from the roughly 43 basis points anticipated at the close of March. Furthermore, the probability of a 25-basis-point rate reduction at the BoE’s upcoming policy meeting in May has escalated to nearly 90%.