This morning, the British pound is trading near a monthly high against the euro, reacting to Donald Trump’s latest tariff announcements. While the US dollar strengthened across the board over the weekend, the pound has gained against its European counterparts, as the UK appears to have sidestepped the worst of the U.S. tariffs.
Trump’s Trade Stance: The UK vs The EU
Speaking late on Sunday, Donald Trump stated that the UK is “out of line”, but that any trade issues “can be worked out”. This signals a potentially softer stance towards Britain compared to the European Union, which has been explicitly warned that tariffs are on the way.
The UK holds a unique trade relationship with the U.S., being one of the few nations to have a trade deficit in goods—meaning it imports more from the U.S. than it exports. This could play a role in future trade negotiations.
US Tariffs Hit Canada, Mexico, and China
- Over the weekend, the U.S. imposed:
- 25% tariffs on Canadian and Mexican imports
- 10% tariffs on Chinese goods
These trade actions have strengthened the U.S. dollar, with gains of 1.5% against the pound and 2% against the euro. Currency traders will be closely watching for further developments in trade policy and market reaction.
Key Market Data to Watch Today
- PMI Data Releases – The UK, Eurozone, and U.S. are all set to release Purchasing Managers’ Index (PMI) data, with expectations of strong readings across the board.
- EU CPI Flash Estimates (10 AM GMT) – Inflation in the Eurozone is projected to remain steady at 2.4% year-on-year, which could influence ECB policy discussions.
- US Trade and Tariff Updates – Markets will be closely monitoring any further tariff-related announcements from the U.S. government.
Navigating Market Volatility
With shifting trade policies and currency fluctuations, businesses need to stay ahead of the curve. If you want expert insights on how these changes could impact your business strategy or currency exposure, speak to our QuMoney specialists today.