Sterling continued to march higher against the US dollar on Tuesday, adding almost a full cent across yesterday’s trading and briefly touching its strongest level since the end of 2021.
For the US dollar, renewed fears around trade tensions have cemented the negative outlook that took hold last week. Combined with this evening’s looming interest rate decision from the Federal Reserve, anxiety around the US dollar has built and sent it tumbling against its major rivals.
Jerome Powell and his fellow policymakers are expected to keep rates on hold at 3.75%. That would mark a pause after three consecutive cuts to end 2025, although markets will be watching closely for any sign that the cautious outlook for this year had shifted. News that consumer confidence had plunged to a 12-year low despite strong headline growth numbers will have been noted by the Fed’s rate committee.
Analysis by Bloomberg found President Trump only followed through with one out of every four tariff threats. That will be a reassuring thought to Canada and South Korea, both of whom are battling to avoid further trade punishment.
In the UK, government ministers announced plans to cap ground rent charges on leasehold properties at £250 per year for an individual property. That move came after friction between the prime minister and his chancellor over the impact on institutional investors like pension funds, which typically hold large portfolios of property.
The European Union (EU) has sealed a trade deal with India after 20 years of negotiations. Playing the mother of all long games, the deal reduces tariffs on a number of industrial goods to zero and is expected to double EU exports to India over the next six years.
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