Sterling Surges Amid U.S. Tariff Turbulence

The British pound climbed against a weaker dollar, driven by U.S. tariff announcements. Traders focus on the upcoming Bank of England decision amidst global economic uncertainties. Meanwhile, UK politics sees a shift as Nigel Farage's party gains influence, reflecting rising right-wing populism concerns.

The British pound edged higher against a weakening dollar on Friday, maintaining its position near a recent three-year peak. The U.S. greenback lost momentum following sweeping tariff announcements by President Donald Trump, which led to a complex trading environment.

As of 1018 GMT, sterling rose by 0.1% against the dollar, reaching 1.3292. However, it slightly faltered against the euro, trading at 85.26 pence. The dollar's decline comes ahead of crucial nonfarm payrolls data, with U.S.-China trade tensions appearing to ease.

Traders are closely monitoring the Bank of England's upcoming policy decision, with predictions of a 25 basis points rate cut. Some economists argue for a more aggressive approach due to global economic challenges exacerbated by tariffs. Concurrently, British politics witnessed a notable shift as Nigel Farage's Reform UK gained additional parliamentary seats, highlighting concerns over rising right-wing populism.

(With inputs from agencies.)