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Trump’s reciprocal tariff threat sparks volatility

Daily Currency Update

According to the British Chambers of Commerce (BCC), Donald Trump’s proposal to impose reciprocal tariffs on all US trading partners is adding to market volatility, with potential repercussions for the UK economy.

While no specific measures have been announced, the uncertainty surrounding US trade policy has put pressure on the pound (GBP), as investors weigh the risk of retaliatory tariffs and potential disruptions to UK-US trade flows. The delay in implementation has provided temporary relief, but FX markets remain cautious as the White House finalises its tariff strategy.

Key Movers

The euro held firm near two-week highs’ as FX markets reacted to President Trump’s proposed reciprocal tariffs and renewed optimism over a potential resolution to the Ukraine war.

Trump’s announcement of country-specific tariffs, set to take effect in April, added uncertainty to global trade flows, but investor sentiment remained cautiously optimistic that negotiations could ease tensions. Meanwhile, hopes for de-escalation in Ukraine supported risk-sensitive assets, as Trump vowed to accelerate peace talks following discussions with Presidents Putin and Zelensky.

Expected Ranges

  • GBP/USD: 1.2555 – 1.2645 ▲
  • GBP/EUR: 1.1985 – 1.2055 ▲
  • GBP/AUD: 1.9835 – 1.9915 ▲
  • EUR/USD: 1.0445 – 1.0525 ▲

Written by

See Wah Li

OFXpert

See Wah is passionate about supporting positive transformations when it comes to managing foreign exchange. As a Senior Currency Consultant at OFX, his goal is to help businesses make informed decisions, alleviate risks, and enhance their currency strategies for success. With over 6 years of experience in the foreign exchange market, See Wah’s strength lies in developing effective solutions to help navigate the complexities of currency fluctuations and mitigate their impacts on business profitability.

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