Pound to Dollar Rate Higher as Renewed Tariff Fears Spook USD Buyers

April 25, 2025 - Written by Tim Boyer

STORY LINK Pound to Dollar Rate Higher as Renewed Tariff Fears Spook USD Buyers

The Pound-to- Dollar exchange rate (GBP/USD) firmed on Thursday as Donald Trump’s latest remarks on American tariffs pressured the US Dollar (USD).

The US Dollar came under pressure on Thursday as investors digested a shift in tone from President Donald Trump on international trade policy.

Earlier in the week, markets had responded positively to Trump’s suggestion that tariffs on Chinese imports could be significantly eased. However, any optimism was quickly reversed after the President hinted at fresh tariffs during remarks at the White House on Wednesday evening.

Trump warned that his delayed reciprocal tariffs could be introduced against certain nations ‘within the next two, three weeks’, reigniting fears of escalating trade tensions.

The remarks unsettled USD investors already wary of the potential impact of US tariffs on the American economy. Trump’s sudden shift in tone also fuelled fears around his unpredictable approach to policy, which has slowly but steadily eroded confidence in the American Dollar in recent weeks.

The Pound (GBP), meanwhile, managed to advance against a softening US Dollar on Thursday, but its performance was more muted elsewhere as market participants weighed disappointing domestic data.

With no fresh UK economic releases on the day, investor attention lingered on Wednesday’s unexpectedly weak PMI figures. The UK services PMI dropped to 48.9 – below forecasts of 51.3 and down from the previous reading of 52.5 – signalling a surprise contraction in the sector and fuelling fears of a broader economic slowdown.


This weaker-than-expected snapshot of activity in the UK’s dominant services industry appeared to cap Sterling’s gains through into Thursday, even as the Dollar came under pressure.

Looking ahead, the Pound could face renewed pressure on Friday with the release of the UK’s latest retail sales figures. Economists are bracing for a 0.4% decline in March, a drop that would reinforce worries about the UK’s economic resilience amid slowing activity in key sectors.

However, last month’s surprise upside in February’s data offers a glimmer of hope. Another unexpected expansion in sales could provide Sterling with a much-needed lift.

Across the Atlantic, the US Dollar enters the final trading session of the week with little in the way of fresh economic data to anchor sentiment. In the absence of major releases, the ‘Greenback’ is likely to remain at the mercy of shifting risk appetite and any new developments from Washington.

Trade policy uncertainty and the spectre of a recession continue to cast a long shadow, keeping volatility elevated as investors assess the broader implications of the White House’s next move.

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TAGS: Pound Dollar Forecasts