US Tariffs: Pound to Dollar Rate at 5-Month Best Rate as Dollar, Equities Crash

April 3, 2025 - Written by Ben Hughes

STORY LINK US Tariffs: Pound to Dollar Rate at 5-Month Best Rate as Dollar, Equities Crash

President Trump’s announcement of reciprocal tariffs with heavy punishment against China, Japan and the EU, triggered a slump in risk appetite.

The dollar also came under heavy pressure amid fears over the US economy and failed to gain defensive support.

The Pound to Dollar (GBP/USD) exchange rate posted strong gains to 5-month highs just below 1.3100.

The Euro was resilient and the Pound to Euro (GBP/EUR) exchange rate traded around 1.1960 after failing to hold above 1.2000.

US S&P 500 futures slumped just over 3.0% and the FTSE 100index is set to open over 1.5% lower.

In his long-awaited announcement on reciprocal tariffs, US Trump announced a baseline 10% tariff on all imports into the US.

These tariffs will start on April 5th.

Risk assets briefly strengthened on reports that tariffs would be held at a flat rate of 10%, but the announcement of additional reciprocal tariffs triggered a slide in equity futures and a notable deterioration in risk appetite.

Additional reciprocal tariffs will be levied on countries depending on the US calculation of net tariffs on US exports and are due to come into effect on April 9th.

Trump stated that the overall reciprocal rate would be calculated at half the tariffs on US goods.

For the UK, the US has deemed no additional penalty is needed with the tariff set at the baseline of 10%.

The US calculates that EU charges to the US are at 39% and the tariff on US imports will, therefore, be set at 20%.

For China, the tariff rate is 34% with 24% for Japan and 31% for Switzerland.

He also confirmed that 25% tariffs on cars and car parts would also go into effect.

Post Tariff Exchange Rates

Sterling posted mixed performance against its major counterparts in the latest session, highlighted by a 1% surge versus the Israeli Sheqel (GBP/ILS) to reach 4.8752.

It also strengthened notably against the US Dollar (GBP/USD) by 0.49%, at 1.31096, and climbed by 0.39% against the Norwegian Krone (GBP/NOK) to 13.60344.

Moderate gains were observed against the Canadian Dollar (GBP/CAD), which rose 0.32% to 1.86075, and the Pound edged up slightly against the Euro (GBP/EUR) by 0.06% to 1.19709.

On the other hand, Sterling softened by 0.24% against the Swiss Franc (GBP/CHF), settling at 1.14139, while it dipped 0.08% against the Australian Dollar (GBP/AUD) to 2.08091.

The Pound also slipped 0.19% versus the New Zealand Dollar (GBP/NZD) at 2.27376, and lost 0.37% to the Swedish Krona (GBP/SEK), retreating to 12.81668.

Elsewhere, Sterling’s performance was mildly upbeat, with gains of 0.18% on the South African Rand (GBP/ZAR) and 0.2% on the Singapore Dollar (GBP/SGD).

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TAGS: Pound Dollar Forecasts