Market News

BY Vicky McKeever·Business reporter

Pound (GBPUSD=X)

The pound surged to a six-month high against the dollar in early European trading, as the greenback sank following US president Donald Trump's announcement of global tariffs on Wednesday.

Sterling was up 0.9% at $1.3109 against the dollar at the time of writing, while the US dollar index (DX-Y.NYB) — which measures the greenback against a basket of six currencies — was down 1.4% to 102.42.

Trump announced a 10% baseline tariff on imports into the US, which will come into effect on 5 April. Additional tariff rates were announced on countries that the administration considered to be the "worst offenders", which will go into effect on 9 April.

The UK was included on the list of countries that would face the 10% baseline tariff rate. There will be a 20% levy on imports from the EU.

Lindsay James, investment strategist at Quilter, said: "For the UK, facing a 10% tariff, it has perhaps got off more lightly compared to other countries and the European Union. But this is still significant and will hit industries hard, particularly given the likes of car manufacturers face an even harsher rate. Whether or not this latest round of tariffs is additional to those already announced remains uncertain, as does the extent of any opportunity to negotiate.

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“Trump has made it clear that this is the end of the established economic order, and he wants America calling the shots," she said." These tariffs are stark and perhaps more aggressive than many in the market had been expecting. Indeed, Trump scheduled this press conference for after the stock market closes for good reason, with the US futures market falling sharply as a result of this speech."

In other currency moves, the pound was down 0.2% against the euro (GBPEUR=X) on Thursday morning, trading at €1.1968.