Pound Holds Steady as UK Navigates Trump's Tariff Threat

The British pound remained stable against the dollar, amid efforts for a UK-U.S. deal to avoid new tariffs. British PM Keir Starmer and U.S. President Trump held talks, discussing economic cooperation. Economists suggest the UK's balanced trading position may mitigate tariff impacts from the U.S.

The British pound stood firm against the U.S. dollar on Monday, as Britain and the U.S. worked to forge a deal to circumvent President Donald Trump's newly proposed tariffs. According to Downing Street, Prime Minister Keir Starmer and President Trump had 'productive negotiations' regarding a UK-U.S. economic prosperity plan during a Sunday evening phone call.

Notably, the pound held its ground at $1.2936 against the greenback, while leveling out at 83.665 pence per euro. Economists believe that Britain's balanced trade position with the United States might lessen the impact of Trump's tariffs, aiding sterling to rise over 2.8% against the dollar in March, marking its best performance since November 2023.

Despite this rise against the dollar, sterling faced a decline against the euro by approximately 1.4%, contrasting the euro's rally, spurred by Germany's financial plans and reforms. Markets are keenly awaiting further developments regarding Trump's tariffs set to unroll against U.S. trading partners soon. Trump has indicated possibilities for nations to negotiate tariff exemptions post-April 2, while Britain grapples with tariffs on steel, aluminum, and forthcoming auto imports.

(With inputs from agencies.)