Dollar drops as Trump tariffs take effect
Written by
Daily Currency Update
The dollar is back under pressure this morning as Donald Trump’s import tariffs came into effect overnight. After being announced in early April and then suspended to allow trade negotiations to take place they were finally enacted at 12:01am Washington time. Many trading partners managed to strike trade deals to lower the initial rate including the EU, Japan and South Korea, all who managed to reduce the charges on their exports to 15%. The effect on the deadline passing without another delay being announced by Trump, is that the US dollar has weakened across the board with EUR/USD gaining around one cent in 24 hours to currently sit around 1.1675. GBP/USD has also gained with it now around 1.3365.Key Movers
The pound's push higher could be short lived depending on the outcome of the Bank of England’s interest rate decision which is due at midday today. It is widely expected that the Bank's Monetary Policy Committee will reduce rates by 0.25% to 4%, so it will be the vote split and the Bank's latest updated economic forecasts and accompanying commentary that will be the key area of interest. Recent growth and labour market data has been underwhelming and should this weigh on the confidence of MPC members then it could lead them to indicate a faster pace of cutting is needed to support a stagnating economy.Expected Ranges
- GBP/USD: 1.3225 - 1.3450 ▲
- GBP/EUR: 1.1400 - 1.1560 ▼
- GBP/AUD: 2.0400 - 2.0590 ▼
- EUR/USD: 1.1610 - 1.1755 ▲