Pound approaches five-month high against US dollar battered by tariffs
The pound rose towards a five-month high against the dollar, trading at $1.2938, as president Donald Trump’s ongoing tariff threats continued to inject volatility into global markets.
As of 9:42:32 GMT. Market open.
Goldman Sachs analysts Dominic Wilson and Kamakshya Trivedi said there had been a “sharp re-rating lower” of US assets “on the back of tariff volatility and the environment of broader policy uncertainty created by the new administration”.
The US dollar index (DX-Y.NYB), which tracks the greenback against a basket of six major currencies, is down almost 6% from a two-year peak set in mid-January amid worries that Trump’s tariffs and retaliatory measures from other countries could push the US economy into a recession.
Data released on Friday revealed that US consumer sentiment had plummeted to its lowest level in nearly two and a half years, with inflation expectations rising amid fears over the impact of sweeping tariffs. These developments have added to the market’s growing anxiety about the intensifying trade war.
HSBC analysts said US retail sales figures due later today “will be a big test for the USD given the slump in consumer confidence surveys”.
As of 9:42:32 GMT. Market open.
Meanwhile, sterling was higher against the euro (GBPEUR=X) on Monday morning, at €1.1896.
Gold prices were steady near their record $3,000, as the escalating US-driven tariff war now also threatens economic growth, adding to other geopolitical uncertainties.
As of 5:32:50 GMT-4. Market open.
Spot gold was muted at $2,988.33 per ounce, while gold futures retreated 0.2% to trade at $2,994.10.
US Treasury Secretary Scott Bessent acknowledged the growing risk of a recession, although he tempered his comments by suggesting that the economic environment could undergo an “adjustment” rather than a full downturn.
“There are no guarantees,” Bessent said on Sunday, referring to the uncertainty surrounding the trajectory of the US economy.
The rise in gold prices this year has largely been driven by fears of stagflation — a combination of stagnating economic growth and high inflation — with investors seeking refuge in the precious metal. Kelvin Wong, senior market analyst for Asia Pacific at OANDA, said that while gold’s short-term momentum remains positive, it faces key resistance levels at $3,016 and $3,030.
Gold, traditionally viewed as a hedge against economic instability and inflation, has seen a 14% increase in value so far in 2025.
Oil prices jumped on Monday, fuelled by concerns over potential trade disruptions following the US’s vow to continue military strikes against Yemen’s Houthi rebels until their attacks on global shipping cease.
Source link
