The British pound climbed to $1.35, supported by broad dollar weakness, as market sentiment stayed cautious amid rising uncertainty over US tariffs and concerns about the Federal Reserve’s independence. With the August 1 deadline approaching, US Commerce Secretary Lutnick reiterated it as a "hard deadline" for implementing tariffs, though negotiations are ongoing. In the UK, focus shifts to key data: flash PMIs are expected to show the mildest manufacturing contraction in six months and the strongest services growth in nearly a year. Retail sales are also forecast to rebound, supported by hot weather. Meanwhile, the Bank of England may slow or pause sales of long-dated bonds due to weak demand from traditional buyers like pension funds. Traders slightly lowered expectations for BoE policy easing but still see two rate cuts in 2025.