GBP/USD: Sterling Eases Attitude in 1.5% Drop as Dollar Muscles Up on New Tariff Talks

Guess who’s back? It’s tariffs doing another leg sweep across forex and stocks and giving the US dollar a strong lift.

💸 Sterling Slides as Dollar Glides

• The pound couldn’t keep its edge on Monday as fresh waves of tariff talk lifted the US dollar across the board, dragging the GBPUSD down 1.5% from last week’s three-year high.
• Sterling now trades near $1.36, backing off its recent run-up to $1.3780 as traders brace for new trade moves that threaten to (again) rattle the forex space just when it was finding its feet.
• The renewed dollar strength shows how quickly sentiment can flip when tariffs are looking to boomerang back on global trade flows.

🎯 August 1: The New Tariff Clock

• Traders are watching Wednesday for the end of Trump’s 90-day pause on “reciprocal tariffs” — but the big hit comes August 1 when the White House says levies will revert to their tough April 2 levels.
• The original tariffs range from 20% to as much as 50% on goods flowing into the US from dozens of countries, leaving global supply chains scrambling for clarity.
• So far, the UK has secured a trade deal, giving sterling some shelter — but other major economies are still hammering out last-minute negotiations. Trump said on Sunday he expects more countries to sign a deal this week… or face those tough tariffs.

🧐 Forex and Stocks Take Notice

• The fresh trade standoff has lit a fire under the greenback, which was struggling to regain ground after a soggy first half of the year. How soggy? It was the worst start in 50 years.
• Cable traders are weighing whether the pound’s epic run can keep going if the dollar stays in comeback mode through the next few weeks. Stocks, in the meantime, offloaded some gains ahead of the opening bell in New York.
• For now, the currency pair looks primed for more volatility as August 1 looms — and traders brace for more jawboning from Trump’s team if no further deals come through.