Pound Sterling Hits Three-Year High as US Dollar Loses Appeal

Pound Sterling Tops US Dollar on Renewed Skepticism About Greenback Reliability

The British Pound (GBP) kicked off the new week with strength, climbing to a fresh three-year high near the 1.3600 mark against the US Dollar (USD). As of Monday, the GBP/USD pair was trading around 1.3567, extending its recent gains driven by broad-based weakness in the Dollar.

Investor confidence in the Greenback continues to erode due to US President Donald Trump's shifting trade policy stance. Over the weekend, Trump postponed the implementation of 50% tariffs on European Union (EU) imports — originally set for June 1 — to July 9 after a phone call with European Commission President Ursula von der Leyen. The move followed a week of contradictory tariff threats, fueling uncertainty and damaging the Dollar’s safe-haven appeal.

Adding to the pressure, Trump also threatened a 25% tariff on Apple for manufacturing outside the United States. The unpredictability of such announcements has weighed heavily on the US Dollar.

Meanwhile, the Bank of England (BoE) is expected to cut interest rates only once more in 2025, offering support to the Pound. This relative policy stability contrasts with growing concerns over the US fiscal outlook and potential for further policy divergence.

The US Dollar Index (DXY), which tracks the currency against a basket of major peers, fell to a one-month low near 98.70 — underscoring the market’s bearish sentiment.

Unless the US government restores clarity around trade and fiscal policy, the GBP could continue to outperform the USD in the near term.