Sterling fell today and is heading for its biggest weekly drop in almost two months as the dollar rallied and Trump's comments isolated a possible US-UK trade deal.
The GBPUSD reached 1.3102, down by 1.2% this week, the biggest weekly drop since late May. With recent positive data from the UK economy, interest rate hike expectations increased at the August meeting.
Also, what puts sterling under pressure the markets worries about EU will demand more concessions from Britain before leaving the EU. Two ministers of Prime Minister Theresa May's government have resigned in protest at the EU's negotiating policy.
The euro also fell to its lowest level since the beginning of July at 1.1615, before recovering and is currently trading at 1.1650 levels. The Japanese yen also fell to a six-month low versus the US dollar in a sign that markets are not interested in the US-China trade dispute.
The US Treasury Secretary said yesterday that the United States and China could reopen talks on trade, and this helped to ease tensions somewhat. But China's trade surplus with the United States printed a record in June could fuel these tensions again.
