Originally published at: This week in charts: Pound soars to three-year high - InvestEngine Insights
The British pound surged against the dollar to its highest level since January 2022 (£1 = $1.328) amid speculation over the U.S. Federal Reserve’s leadership.
A Wall Street Journal report suggested Donald Trump may soon announce a replacement for Jerome Powell, whose term ends in May next year.
Markets reacted negatively to the possibility of a more dovish Fed chair, weakening the dollar. Trump has criticized Powell for resisting interest rate cuts. The pound’s rise of 9.6% this year has been fueled by a softer dollar and easing fears of a UK recession.
S&P 500 nears an all time high
The S&P 500 closed just shy of a new all-time high on Thursday, capping off a remarkable rebound from its April lows. This rally reflects investors’ renewed confidence despite months of pressure from persistent inflation, geopolitical tensions, and uncertainty around trade policy.
The market’s momentum picked up notably after comments from White House spokesperson Karoline Leavitt eased concerns about looming tariff deadlines. Leavitt downplayed the significance of the July timeline, stating, “The deadline is not critical. Perhaps it could be extended, but that’s a decision for the president to make.”
Her remarks signaled potential flexibility in the administration’s trade strategy, which markets interpreted as a positive sign, pushing stocks to session highs.
This development underscores how sensitive equities remain to geopolitical signals, even amid strong underlying economic and earnings data.
NVIDIA is once again the largest company in the world
Nvidia reclaimed its status as the world’s most valuable public company, closing at a record $155.02 per share, surpassing Microsoft with a market cap near $7.782 trillion.
Nvidia’s growth has been fueled by its AI chips, which are used by companies including OpenAI to develop software such as ChatGPT.
This milestone capped a sharp rebound. After a 37 % decline in April, due to competition from China’s DeepSeek and U.S. tariffs, shares have now surged over 60%.
Analysts at Barclays, Bernstein, Jefferies, UBS, and Loop Capital have raised price targets—some as high as $250—driven by optimism around Nvidia’s Blackwell AI chips and robust AI demand.
Export restrictions to China, which could trim circa $8 billion in revenue, haven’t dampened enthusiasm, and the rollout of next-gen AI infrastructure supports expectations of expanding margins and further gains.
Dollar falls to a three-year low
On the back of the comments made this week by Donald Trump on Jerome Powell, the dollar continues to lose strength—over 10% this year.
If the U.S. dollar’s current losses persist through the end of June, it would mark its steepest first-half decline since the early 1970s, when free-floating exchange rates began—underscoring the market’s deep unease over political interference in monetary policy and growing expectations of future Fed rate cuts.
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