Pound to Australian Dollar SURGES to Best Buy in 9 Years on Global Trade War Fears

April 5, 2025 - Written by David Woodsmith

STORY LINK Pound to Australian Dollar SURGES to Best Buy in 9 Years on Global Trade War Fears

The Australian dollar has crashed in global markets on Friday amid a fresh slide in risk appetite.

The currency lost over 4.5% against the dollar during the day and there were sharp losses against most majors.

The Pound to Australian dollar (GBP/AUD) exchange rate surged to 9-year highs around 2.1380

During Friday, China announced that it would impose tariffs of 34% on imports from the US.

The swift retaliation from China reinforced fears surrounding the global economy and risk appetite took another dive with sharp losses for equities.

ING commented; “The retaliation should come as no surprise. The aggressive tariff hikes followed by an invitation to come and negotiate was never going to fare well in China. Trump’s hopes for a TikTok deal using tariffs as a sweetener look like a very long shot at this juncture.”

It added; “As China’s Ministry of Foreign Affairs signalled last month, “if the US has other intentions and insists on a tariff war, trade war or any other war, China will fight to the end.” After earlier measured responses to the fentanyl tariffs still kept some hopes for negotiation alive, it looks like the second trade war is well under way.”

MUFG commented; “The risk of a more disruptive trade war would escalate further if other major trading partners who have stronger bargaining positions such as the EU and China decide to retaliate.”

The severe deterioration in risk appetite and increased fears over a downturn in the international economy hurt the Australian dollar with the impact magnified by major concerns surrounding the Asian outlook.

The substantial tariff increases on China, Japan and South Korea intensified fears over a major hit to the regional economy.

ANZ commented; “The newly stipulated tariffs are disproportionately stiffer for Asia.”

The New Zealand dollar also posted sharp losses with the Pound to New Zealand dollar (GBP/NZD) exchange rate surging to 9-year highs at 2.3100.

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TAGS: Pound Australian Dollar Forecasts