Trade tensions threaten UK growth
Written by
Daily Currency Update
Concerns are growing that Donald Trump’s escalating trade war could weigh heavily on the UK economy, even as he begins to soften some of his earlier hard-line measures.While the UK faces a comparatively modest 10% tariff, the broader disruption to global trade is expected to hamper economic growth and increase volatility in the foreign exchange markets. Uncertainty around trade flows and investor confidence is already fuelling fluctuations in sterling.
Bank of England Governor, Andrew Bailey, issued a warning during the IMF Spring Meetings' in Washington last night, highlighting the risks of rising protectionism and its ripple effects on global growth and currency stability.
Key Movers
The US dollar staged a rebound against major currencies as easing trade tensions and signs of stability within the Federal Reserve offered relief to investors and currency markets alike.Renewed optimism followed reports that the Trump administration is considering lowering tariffs on Chinese imports, pending further negotiations with Beijing. While no unilateral action has been confirmed, the prospect of a more conciliatory approach helped ease global trade anxieties.
At the same time, President Trump backed away from threats to dismiss the Federal Reserve Chair, which provided an additional layer of reassurance to markets. Together, these developments boosted the USD, particularly against the euro, as traders reacted to a perceived reduction in geopolitical and monetary policy risks.
Expected Ranges
- GBP/USD: 1.3255 - 1.3335 ▲
- GBP/EUR: 1.1625 - 1.1715 ▼
- GBP/AUD: 2.0805 - 2.0895 ▲
- EUR/USD: 1.1345 - 1.1425 ▲