The pound has surged to a four-month high against the US dollar as concerns over Donald Trump’s escalating trade war spark fears of an American recession.
Sterling edged up by 0.1% on Tuesday, surpassing the $1.30 threshold for the first time since November, as the US president’s hardline stance on tariffs unnerved global markets.
US Treasury Secretary Scott Bessent fuelled uncertainty over the weekend, cautioning that there were “no guarantees” the United States could avoid an economic downturn. However, he later sought to reassure investors by stating that the underlying economy remained “healthy.”
On Monday, Mr Trump doubled down on his trade policies, pledging no exemptions for his metal tariffs and reaffirming a commitment to broad-based reciprocal tariffs set to take effect from 2 April.
The turmoil has left central banks on both sides of the Atlantic in wait-and-see mode, with analysts expecting the Bank of England and the US Federal Reserve to hold interest rates steady at their upcoming meetings.
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