Pound Sterling (GBP)

The British Pound has shown resilience amidst the turmoil caused by President Trump’s tariff threats, as markets perceive the UK to be relatively shielded from these trade tensions. Trump’s confirmation of 25% tariffs on Canada and Mexico, along with a 10% tariff on China, has sparked concerns for other currencies, yet the Pound has maintained its strength. The UK’s balanced trade relationship with the US has lent it a safe-haven status, with market sentiment suggesting the UK is less vulnerable to these tariffs compared to major exporters such as the EU.

Euro (EUR)

The Euro has experienced a downturn, falling to a two-week low against the Dollar and further declining against the British Pound. This slump is attributed to heightened risk aversion following President Trump’s tariff threats. His remarks about potentially imposing a 25% tariff on European imports, including automobiles, have exacerbated the Euro’s decline. In response, EU leaders have issued warnings of retaliation, whilst comments from ECB officials have fuelled expectations of a rate cut, further weakening the Euro as market sentiment remains cautious.

U.S. Dollar (USD)

The US Dollar has strengthened for the second day in a row, with the Dollar index climbing 0.5% to 106.97. Investors have reacted to President Trump’s statements regarding potential tariffs, including a postponement of levies against Canada and Mexico until 2 April. Trump’s comments also alluded to a possible 25% tariff on European Union goods, contributing to the Dollar’s upward movement as markets await economic data on consumer spending and inflation.