Sterling at five-week low against dollar as markets mull Middle East risk
LONDON (Reuters)The pound fell against the dollar on Monday with the greenback benefiting from safe-haven demand as investors assessed the risk of an Iranian response to US attacks on its nuclear sites.By 1054 GMT the pound was down 0.5% versus the dollar at $1.33795, its lowest level since May 20.Market focus is firmly on the price of oil, which earlier spiked as much as 5.7% and was last up 0.5%.Elsewhere, UK flash PMIs hit screens showing business activity expanded modestly in June, but the data barely moved the needle on the pound.The S&P Global UK Composite Purchasing Managers' Index rose to 50.7 from 50.3 in May - edging further above the 50.0 growth threshold.
The Bank of England held interest rates at 4.25% last Thursday as expected but flagged a weaker labour market and the risk of higher energy prices as conflict in the Middle East escalated.
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Al Etihad
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The run-up to Trump's tariff deadline was unfolding as federal appeals court judges sharply questioned Trump's use of a sweeping emergency powers law to justify his sweeping tariffs of up to 50% on nearly all trading invoked the 1977 International Emergency Economic Powers Act to declare an emergency over the growing U.S. trade deficit and impose his "reciprocal" tariffs and a separate fentanyl emergency. The Court of International Trade ruled in May that the actions exceeded his executive authority, and questions from judges during oral arguments before the US Appeals Court for the Federal Circuit in Washington indicated further skepticism. Meanwhile, China is facing an August 12 deadline to reach a durable tariff agreement with Trump's administration, after Beijing and Washington reached preliminary deals in May and June to end escalating tit-for-tat tariffs and a cut-off of rare earth minerals.A U.S. official told reporters that they are making progress toward a deal.
