Pound Holds Steady Amid U.S. Tariff Threats

The British pound remained stable against the dollar, following tariff threats by U.S. President Trump targeting the EU. Analysts suggest the UK could outperform due to a smaller trade deficit. Simultaneously, British Prime Minister Starmer is meeting with Trump, discussing security and military spending increases.

The British pound held steady on Thursday, maintaining its position just below a recent two-month high in the wake of U.S. President Donald Trump's latest tariff threats directed at the European Union. Sterling traded at $1.2674 against the dollar, following a peak of $1.2717 on Wednesday.

Danske Bank analyst Mohamad Al-Saraf noted that the UK's relatively small trade deficit with the U.S. could position the pound as a strong performer amid potential import tariffs. This resilience is further supported by market expectations of fewer rate cuts from the Bank of England compared to the European Central Bank.

British Prime Minister Keir Starmer is in Washington for talks with Trump, focusing on security matters and UK's commitment to increase defense spending. The potential for a Ukraine ceasefire is also on the agenda as the pound remains steady against the euro at 82.7 pence.