The British pound demonstrates its strongest quarterly performance since 2023 because of the weakening U.S. dollar and improved expectations about U.K.-U.S. trade relations.
The dollar value of sterling has increased by 6% during this quarter and 9% during the past six months because investors doubt President Donald Trump’s unpredictable trade and fiscal policies. The pound experienced a 0.1% decline to $1.3705 during Monday’s trading session following its recent two-week price surge.
The U.K. achieved a new trade agreement with the U.S. which established reduced tariffs for specific industrial products thus becoming the first major economy to do so. The agreement has created positive market sentiment toward British assets since it provides stability compared to the EU where Washington and Brussels have not reached a settlement.
The economic data provided support for sterling’s upward movement. The U.K. economy achieved its fastest growth rate during Q1 2025 but consumer demand indicators started showing signs of weakening. The currency shows strong performance among major currencies this year but analysts predict political and inflation risks will restrict additional gains.
