GBP/USD falls as Trump tariff threats, UK fiscal concerns weigh

• GBP/USD weakens to 1.3330 on Monday, down 0.25% for the day.
• Donald Trump's threat of new tariffs on China fuels market caution.
• Investors await BoE member Catherine Mann's speech ahead of UK employment data on Tuesday.

GBP/USD falls around 1.3330 on Monday, losing 0.25% for the day at the time of writing. The US Dollar (USD) strength limits any rebound in the pair, despite a generally risk-off market mood following US President Donald Trump's renewed tariff threats against China.

On Friday, Trump announced his intention to impose 100% tariffs on Chinese imports starting November 1, in response to Beijing's restrictions on exports of rare earth elements and strategic equipment. China defended its measures as a legitimate response to US economic aggression, though it stopped short of announcing new duties on American goods for now.

The growing uncertainty surrounding trade relations between the world's two largest economies is fueling risk aversion. According to Jan Hatzius, Chief Economist at Goldman Sachs, "recent trade policy moves suggest a wider range of possible outcomes, from potential concessions to temporary but substantial increases in export restrictions and tariffs."

Domestic factors are also weighing on the Pound Sterling (GBP). Markets expect UK Chancellor of the Exchequer Rachel Reeves to announce new tax hikes in the Autumn Statement to address the country's ballooning fiscal deficit. A move that could dampen household sentiment and consumer spending.

Attention now turns to the Bank of England (BoE) Monetary Policy Committee member Catherine Mann's speech, which is scheduled for Monday at 19:10 GMT, and may offer clues about the central bank's current stance amid mounting economic headwinds. Next, UK employment data for the three months ending in August is due on Tuesday, which could shape the Bank of England's next policy steps.

Caution is likely to prevail at the start of the week, with US markets closed for Columbus Day and investors closely monitoring developments in the trade dispute between Washington and Beijing.