Sterling Falls to 10-Week Low

The British pound fell to $1.336, the lowest since May 20, as weak UK data shifted market focus from inflation to slowing growth while trade optimism lifted the US currency. While warm weather boosted food sales, overall economic momentum remains fragile, with recent PMI data disappointing. This has fueled expectations that the Bank of England may cut interest rates by 25 basis points in August, with another cut likely by year-end, as it shifts focus to supporting growth. Meanwhile, the US dollar strengthened after the US and EU reached a trade deal imposing 15% tariffs on most EU exports, including cars. The agreement, announced by President Trump and EU President von der Leyen, eased trade war fears just before a tariff deadline, giving the dollar a further boost.