The pound started Monday at an eight-month low against the euro after US President Donald Trump’s package of trade tariffs caused shockwaves across the globe.
Last week was one of those chaotic, unpredictable events we so often warn about. In just three days, GBP/EUR fell by more than three cents, while GBP/USD somehow ended play almost unchanged from the week prior, despite an almost 2% surge on Wednesday.
There is no question things will get messy again this week, such is the scale of the uncertainty. To remove the risk to your budget now, we suggest locking in today’s GBP/EUR rate. Your account manager will be happy to assist with this if you give them a ring on 020 8003 4915.
Without getting too technical, it’s been a bit of a bloodbath since Wednesday, when president Trump first announced sweeping tariffs on almost every economy in the world. Key US stock markets fell by another 3% (already having lost trillions) after China announced retaliatory tariffs. Early signs from Asia this morning point to the rout extending into this week.
Prominent political and economic talking heads crowded the airwaves with dire warnings. The International Monetary Fund (IMF) warned that the tariff package posed a “significant risk” to global trade. Stock markets (and the Federal Reserve chair, Jerome Powell) certainly agreed, while Sir Keir Starmer opined that “the world as we know it has gone” in the Sunday Telegraph — not exactly light weekend reading.
A few economic events promise to divert attention from tariffs this week, even if only briefly. The UK reports February’s economic growth data on Friday, while the US dollar will be impacted by Federal Reserve minutes and inflation figures on Thursday afternoon.
Remember, you’ll soon be able to read our April-June Quarterly Forecast (following a hasty rewrite). Grab your copy to see what all these fascinating, bewildering developments mean for your budget moving forward.
