Pound to Dollar News: GBP/USD Exchange Rate Unsteady Amid Renewed Trump Tariff Concerns

February 11, 2025 - Written by Frank Davies

STORY LINK Pound to Dollar News: GBP/USD Exchange Rate Unsteady Amid Renewed Trump Tariff Concerns

The Pound to US Dollar exchange rate (GBP/USD) saw choppy movement at the start of the week as investors reacted to fresh tariff threats from US President Donald Trump.

The US Dollar (USD) experienced mixed movement on Monday as markets digested Donald Trump’s latest protectionist policies.

Over the weekend, Trump announced plans to impose a 25% tariff on all steel and aluminium imports to the US, reinforcing his stance on trade protectionism.

Furthermore, he hinted at upcoming ‘reciprocal’ tariffs, stating that any nation imposing taxes on US exports should expect similar treatment.

Markets were unsettled by Trump’s comments, fuelling fears of escalating global trade tensions.

While this boosted demand for safe-haven assets—sending gold to record highs—the US Dollar’s gains were capped by uncertainty over how such measures might impact the US economy.

Investors also remained wary following Trump’s abrupt reversal on proposed tariffs for Mexico and Canada last week, raising doubts over whether his latest plans would come to fruition.

The Pound (GBP) managed to hold its ground on Monday, despite ongoing market turbulence linked to Trump’s tariff threats.

Investor sentiment towards Sterling remained stable, as analysts suggested that the UK economy would be less affected by the new tariffs due to its relatively low export volume to the US.

Additionally, the Pound continued to draw support from comments made by Bank of England (BoE) Chief Economist Huw Pill at the end of last week. Pill signalled that the BoE still had work to do in tackling inflation, which helped limit Sterling’s downside.

Looking ahead, tariff developments may take a back seat on Tuesday as the Pound to US Dollar exchange rate shifts focus to remarks from Federal Reserve Chair Jerome Powell.

Powell is set to testify before Congress, and USD investors will be keenly analysing his tone on monetary policy.

If Powell indicates that persistent inflationary pressures require the Fed to maintain higher interest rates for longer, the US Dollar could climb higher.

Meanwhile, Bank of England Governor Andrew Bailey is also scheduled to speak on Tuesday. If Bailey maintains the dovish stance he adopted following last week’s policy meeting, the Pound may face additional headwinds.

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TAGS: Pound Dollar Forecasts