Pound rises against a soft dollar as Trump tariff worries continue to play out
Sterling headed above the $1.29 mark in early trade on Friday in London, up 0.2% to cap off a week of gains. On Thursday it hit a four-month high against the dollar.
Over the past five sessions cable has risen around 2.4%, reflecting geopolitical uncertainty around president Donald Trump’s tariff policy and negotiations to try to end the Ukraine-Russia war.
The US dollar index (DX-Y.NYB), which tracks the greenback against a basket of currencies, dipped 0.2%, meanwhile. Its month-on-month losses are 3.9%.
Currency traders have tended towards safe haven assets such as the Swiss franc over the past few weeks as risk aversion rises. Concerns have set in about what Trump’s tariffs could do to both the US economy and countries that see it as a major trading partner.
“Layoffs up, inflation up, consumer confidence down,” said Neil Wilson, analyst at TipRanks. “The new Trump effect in action was clear to see. US employers announced 172,017 layoffs for February, up 245% from January and the highest monthly amount since July 2020.
“More than one-third of the total came from Elon Musk’s DOGE cull of federal employees. Nonfarm payrolls are due later, seen +159k, with wages +0.3% and unemployment 4.0%.”
As of 9:26:52 GMT. Market open.
The euro strengthened on Friday morning, heading 0.2% higher against sterling. Thursday saw the biggest selloff of the pound against the euro in five months, following a commitment by the new German government to boost infrastructure and defence spending.
Surging bond yields also boosted the euro exchange rate.
As of 9:27:40 GMT. Market open.
Gold futures prices slipped slightly on Friday, but were still near all-time-highs at $2,922 an ounce, as traders look to key economic data later in the day. Gold’s spot price crept up 0.3%, meanwhile, to $2,920.
Friday’s US jobs report will act as an economic yardstick, while market watchers assess the state of the US economy and its potential for growth.
Growth and inflation have been sticky subjects in recent weeks amid possible trade and tariff disruptions by Trump.
A weaker dollar makes gold a more attractive prospect. Investors also typically head to haven assets in times of economic uncertainty.
As of 4:17:43 GMT-5. Market open.
Oil prices rebounded slightly on Friday, after three days of losses, as markets were shaken by the potential for slowed economic demand.
The black commodity headed to its lowest level in nearly three years on Thursday, with both crude and West Texas Intermediate (WTI) headed for large weekly losses.
As it stands on Friday, crude was 0.8% higher by 8.40am in London, trading just above the $70 a barrel mark. Still, it’s set for a weekly loss of 4.4%.
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