The GBP/USD currency pair settled above Friday’s low of 1.3480, its weakest level since June 23rd, as the greenback gained on renewed tariff concerns.

This week, US President Donald Trump said the US would impose a 35% tariff on Canadian imports and announced plans of blanket duties of 15% or 20% on the majority of other trading partners.

This followed a 50% tariff announcement on Brazilian imports and a similar duty on copper imports.

All of these tariffs are set to take effect on August 1st.

The market reaction to the new tariffs has been mostly muted in comparison to the heavy sell-off that followed April’s “Liberation Day”.

Meanwhile, the Sterling sank after data showed the UK economy had shrunk for a second straight month in May, which added to expectations that the Bank of England could cut interest rates next month.

UK GDP contracted 0.1% month-on-month in May, following a 0.3% contraction in April. The latest figure confounded market expectations of 0.1% growth.

“Though it would be wrong to conclude from the GDP data alone that the economy is coming under greater pressure, there are genuine questions emanating from the jobs market and whether it is beginning to fall apart more quickly,” James Smith, economist at ING, was quoted as saying by Reuters.

“For the (BoE), it would likely force a rethink on the pace of rate cuts. Until now, officials have appeared highly reluctant to move beyond their recent, gradual once-per-quarter cutting pace.”

Markets are now pricing in a 78% chance of a 25 basis point interest rate cut by the BoE in August, compared to 64% chance two weeks ago.

The GBP/USD currency pair settled 0.67% lower at 1.3482 on Friday.

The major Forex pair lost 1.14% for the week.