The dollar hit a three-month low on Tuesday as President Trump’s long-threatened tariffs came into force. EUR came out best from the turmoil, up 1.6% on USD and 0.7% on GBP. But today is due to be another volatile day.
To protect your budget from all this week has in store, lock in today’s GBP/EUR rate with a call to your account manager on 020 8003 4915.
First announced last month, just weeks into his second presidency, Trump brought into force his tariffs against Canada and Mexico. Both trading partner’s exports will now face 25% duties when imported to the US. Canada retaliated with its own spread of tariffs on US products. For good measure, Trump also doubled last month’s tariffs on Chinese imports to 20%.
Americans have been warned they will face higher prices in supermarkets as Canada and China announced retaliatory tariffs. Speaking to Congress last night, Trump said the growing trade war will cause “a little disturbance”.
The UK and Europe aren’t immune to the turbulence over the Atlantic. While both the euro and pound enjoyed boosts, as traders sold dollars and bought safer currencies, Trump has threatened further tariffs will come into force on April 2, and these will likely include duties on European imports.
While last week’s meeting between Trump and UK prime minister Keir Starmer appeared to go well, there may be tariffs coming the UK’s way, too. In any event, economists predict that price increases won’t be confined to America.
Later today, UK governor of the Bank of England Andrew Bailey will be speaking before the Treasury Select Committee about February’s interest rate cut. He has already said he would like to see more cuts this year, and his answers today may indicate how soon the next cut could be expected. 2025 has already seen strong numbers on mortgage applications in the UK, so a further rate cut may only accelerate house sales.
