Pound holds near three-year high despite dip against dollar

On Tuesday, the pound edged lower against the dollar. Nevertheless, the British currency held near the three-year high it reached on Monday, as relatively upbeat economic data lifted market sentiment, Reuters reports.

Meanwhile, the dollar has been strengthening against a basket of major currencies since Tuesday. Investors took comfort from the US President's decision to delay the imposition of import tariffs on the European goods, the agency notes.

However, the pound has gained over 8% against the greenback since the start of 2025 amid Donald Trump’s erratic trade policy.

Concurrently, last week's uptick in UK inflation has dashed market expectations for monetary policy easing by the Bank of England at its June meeting. Reuters-polled analysts forecast that the central bank will keep borrowing costs unchanged.

Friday's data showed an increase in UK retail sales in April. British shop prices fell slightly overall this month, Reuters observes.