Daily FX Report – Tariffs In Focus

Pound Sterling (GBP)

The British Pound remains strong against most G10 currencies, benefiting from its relative protection from U.S. tariffs. Trump’s remarks indicate that the UK’s trade balance will be largely unaffected, as only 15% of its goods exports go to the U.S. Moreover, with a neutral trade balance and a surplus in services, the Pound is viewed as a safe-haven currency amid tariff uncertainties.

 

 Euro (EUR)

The Euro is under pressure due to President Trump’s tariffs, which are particularly impacting the Eurozone’s key industries, such as automobile manufacturing. These trade barriers are expected to slow EU export growth, dragging down the Euro. As the Dollar strengthens amid the trade war, the Euro’s outlook weakens further. Ultimately, the tariffs are likely to have a negative effect on the Eurozone economy, leading to a decline in the single currency’s value.

 

U.S. Dollar (USD)

The U.S. Dollar rose sharply following Trump’s implementation of additional tariffs, pushing the Dollar Index to a three-week high. However, while tariffs have boosted the Dollar, analysts warn that further gains may be limited as the market focuses on how much is of this news is already priced into the Dollar.