Pound Sterling trades cautiously amid Trump’s new tariff threats
- Pound Sterling dips slightly to around 1.3580 versus US Dollar following Trump’s new tariff threats.
- Trump plans to unveil new tariffs on multiple countries, targeting copper and pharmaceutical sectors.
- UK gilt yields increase, signaling potential long-term fiscal challenges.
The Pound Sterling (GBP) has decreased slightly to around 1.3580 against the US Dollar during Wednesday’s European trading session, following US President Donald Trump’s announcement of potential new tariffs on Tuesday.
Currently, the US Dollar Index (DXY), which measures the strength of the US Dollar against a basket of six major currencies, is trading at 97.50, showing stability and remaining close to the weekly high of approximately 97.80.
Trump disclosed in a cabinet meeting on Tuesday his plans to impose a 50% tariff on copper imports to encourage domestic production, although no specific timeline was provided. This is the fourth category targeted by Trump’s tariffs, following automobiles and auto parts, steel, and aluminum.
Moreover, Trump also threatened additional 10% tariffs on BRICS nations due to their de-dollarization efforts, and a 200% tax on pharmaceutical imports starting next year.
Market Update: Pound Sterling stabilizes while UK fiscal concerns grow
- The Pound Sterling shows signs of stabilizing against major currencies on Wednesday. The recovery follows a significant downturn last week, driven by a sell-off in UK gilt securities after Chancellor Rachel Reeves breached her fiscal rules to fund a major welfare reform.
- UK gilt yields surged last week following Reeves’ announcement of an increase in Universal Credit allowances in the House of Commons, which is expected to increase the government’s financial obligations by £4.8 billion by 2029-2030.
- The rise in gilt yields indicates higher interest costs for the government. According to the Office for Business Responsibility (OBR), the UK has one of the highest borrowing costs among developed nations, with 10-year gilt yields at approximately 4.63%.
- Key economic indicators, such as the monthly GDP and factory data for May, are anticipated to be released on Friday, drawing significant investor attention.
British Pound PRICE Today
The table below displays today’s percentage changes of the British Pound against major currencies, with the Pound showing the weakest performance against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.17% | 0.03% | 0.07% | 0.25% | 0.04% | 0.10% | -0.05% | |
| EUR | -0.17% | -0.12% | -0.10% | 0.08% | -0.10% | -0.08% | -0.10% | |
| GBP | -0.03% | 0.12% | 0.06% | 0.21% | -0.05% | -0.02% | -0.07% | |
| JPY | -0.07% | 0.10% | -0.06% | 0.16% | -0.01%</td
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