Dollar dumped as Trump unveils global trade tariffs

Daily Currency Update

The US dollar has been dumped overnight as Donald Trump finally unveiled his much-anticipated trade tariffs for countries around the world. A baseline 10% on all imports to the US was implemented with additional charges put on countries who were deemed to be worse offenders re: charges on US imports to their countries.

The UK was placed on the baseline 10% tariff along with other “friendly” countries such as Australia and New Zealand. The EU was hit with 20% to which EU Commission chief, Ursula von der Leyen has promised to retaliate. China, who Trump deems the worst offender was hit with an additional 34% on top of the 20% already in place. As a result, EUR/USD rallied hard getting close to 1.10 before retracing, a close to two cent gain in 24 hours. The pound has benefitted from the minimum charge being applied as well as an indication from Keir Starmer that the UK will not retaliate, hoping instead to defuse the situation by talking to US counterparts about a trade deal.

GBP/USD is now trading at its highest level since October 2024 with the pair touching 1.31. Economists now predict four rate cuts from the US Federal Reserve, up from three this time yesterday as well as increasing chances of a recession hitting the US and many other countries around the world.