Sterling Soars as Dollar Weakens Amidst Global Trade Tensions

Sterling reached a six-month peak against the dollar as global trade tensions flared following President Trump's tariff announcements. These tariffs, ranging from 10% to 25%, could trigger a trade war impacting economies worldwide. The pound rose to $1.3181, but fell against the euro. Analysts suggest cautious optimism concerning UK-U.S. trade negotiations.

In a tumultuous week for global currencies, sterling surged to a six-month high against the dollar on Thursday. This development follows President Donald Trump's announcement of new trade barriers that have incited fears of an economic slowdown.

Trump declared a baseline 10% tariff on all U.S. imports, escalating concerns of a global trade conflict. The announced tariffs, aimed at major trade partners including the EU, China, and Vietnam, have particularly impacted the pound, especially given Britain's 10% tariff imposition, though British cars, steel, and aluminium face higher rates.

While the pound strengthened to $1.3181, it saw a decline against the euro at 84.04 pence per euro. Analysts, including Lee Hardman of MUFG and Nicholas Rees of Monex Europe, discuss the potential mitigating effects of a UK-U.S. trade deal and the fiscal challenges ahead for Britain's financial leaders.

(With inputs from agencies.)