Thursday, 11 September 2025
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Pound Sterling rallies against US Dollar as Trump tariffs stoke recession fears
Thursday, 3 April 2025 15:27 WIB | GBP/USD |GBP/USD

The Pound Sterling (GBP) surges above 1.3100 against the US Dollar (USD) during the European trading hours on Thursday, the highest level seen in almost six months. The GBP/USD pair soars as the US Dollar plummets after United States (US) President Donald Trump unveils worse-than-expected tariffs for his trading partners.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, tumbles to near 102.70.

US President Trump announced a 10% baseline duty on all products entering the US and additional specific levies on the majority of its trading allies, which have followed threats of countermeasures by their leaders.

Market participants expect that the full-scale implementation of tariffs will lead the US economy to a recession. Such a scenario underpins the need for more interest rate cuts from the Federal Reserve (Fed) despite knowing that higher levies have also stoked worries about persistent inflation.

US Council of Economic Advisers Chair Stephen Miran also agreed to expectations that Trump's protectionist policies could lead to "short-term bumps" in the economy, as per his interview with Fox Business. However, he clarified that the president is focused on "long-term economic transition" and improvement in the "durability, sustainability and fairness" of the American economy with respect to the rest of the world.

Source: FXStreet

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