Sterling's Hold: A Non-Retaliatory Approach to US Tariffs

Sterling stabilized against the dollar, maintaining a position below recent highs. The UK refrained from retaliatory measures against US tariffs on steel and aluminium, hoping to secure an exemption. Despite a decline against the euro, the pound remains steady against the dollar, benefiting from a balanced trade position.

Sterling stabilized against the dollar on Wednesday, maintaining its stance below recent four-month highs. This comes as the UK cautiously avoided retaliatory tariffs on US imports of steel and aluminium, a move seen as an attempt to secure an exemption.

The pound, holding steady at $1.2943 after peaking at $1.29655, reflects Britain's hope to sidestep US tariffs, which could impact its niche steel sector involved in defense and other industries. President Donald Trump indicated a potential bilateral deal that may avert duties.

On another front, the pound's performance against the euro has been lackluster due to Germany's fiscal moves, which bolstered bund yields. Kenneth Broux of Societe Generale noted the pound's position as a non-driving force, emphasizing the euro's recent strength.

(With inputs from agencies.)