<p>The pound weakened against the dollar and the euro on Monday as investors shied away from risk-sensitive assets, as uncertainty grew around global trade policy and fears mounted of a recession triggered by US President Donald Trump's tariffs.</p><p>Global financial markets were delivered a significant blow on Monday after Trump warned foreign governments they would have to pay "a lot of money" to lift the levies that he called "medicine".</p><p>Sterling fell to a new one-month low of $1.2825 and was last down 0.5% against the greenback. On Friday, it dropped roughly 1.5% - its biggest single-day drop since March 2023.</p><p>Against the euro, the pound softened to 85.38 pence. It also weakened against traditional safe-haven currencies such as the Japanese yen and the Swiss franc.</p><p>Investors ramped up their bets on Monday for the Bank of England to cut interest rates. Markets have fully priced in a quarter-point rate cut by the BoE in May by 1013 GMT.</p><p>The British currency had initially held up against the dollar when Trump's sweeping tariffs, including the 10% against Britain, were announced last week, as traders' immediate reaction was to sell the dollar.</p><p>However, fears of a recession have led to a broader sell-off in global stock markets and sent investors scurrying to safe-haven assets.</p><p>"I guess there was some hope over the weekend that maybe we would see this as part of the start of a negotiation, but the messages that we've so far seen suggest that the President Trump is comfortable with the market reaction and that he's going to continue on this course," said Richard Flax, chief investment officer at Moneyfarm.</p><p>Britain softened demands on automakers to switch to production of electric vehicles on Monday, seeking to alleviate pressure on an industry left reeling from Trump's tariffs.</p><p>(Reporting by Yadarisa Shabong in Bengaluru; Editing by Amanda Cooper)</p>
<p>The pound weakened against the dollar and the euro on Monday as investors shied away from risk-sensitive assets, as uncertainty grew around global trade policy and fears mounted of a recession triggered by US President Donald Trump's tariffs.</p><p>Global financial markets were delivered a significant blow on Monday after Trump warned foreign governments they would have to pay "a lot of money" to lift the levies that he called "medicine".</p><p>Sterling fell to a new one-month low of $1.2825 and was last down 0.5% against the greenback. On Friday, it dropped roughly 1.5% - its biggest single-day drop since March 2023.</p><p>Against the euro, the pound softened to 85.38 pence. It also weakened against traditional safe-haven currencies such as the Japanese yen and the Swiss franc.</p><p>Investors ramped up their bets on Monday for the Bank of England to cut interest rates. Markets have fully priced in a quarter-point rate cut by the BoE in May by 1013 GMT.</p><p>The British currency had initially held up against the dollar when Trump's sweeping tariffs, including the 10% against Britain, were announced last week, as traders' immediate reaction was to sell the dollar.</p><p>However, fears of a recession have led to a broader sell-off in global stock markets and sent investors scurrying to safe-haven assets.</p><p>"I guess there was some hope over the weekend that maybe we would see this as part of the start of a negotiation, but the messages that we've so far seen suggest that the President Trump is comfortable with the market reaction and that he's going to continue on this course," said Richard Flax, chief investment officer at Moneyfarm.</p><p>Britain softened demands on automakers to switch to production of electric vehicles on Monday, seeking to alleviate pressure on an industry left reeling from Trump's tariffs.</p><p>(Reporting by Yadarisa Shabong in Bengaluru; Editing by Amanda Cooper)</p>