Sterling and the euro have risen against the dollar amid fears of a ‘Trumpcession’ (Image: Getty)
is under mounting pressure to show he has a plan to grow the US economy instead of pushing it into recession. Fears about the US economy and the impact of President on Monday, with stocks close to 9% below an all-time high. The Dow Jones Industrial Average was down 202 points, or 0.5%, in early trading on Tuesday. It had been down more than 1,100 points at one point yesterday (March 10). The Nasdaq composite of tech stocks remained virtually unchanged.
Meanwhile, the and euro have both risen against the dollar, reaching their highest level since the . The rose a cent to $1.093 while sterling hit $1.295, its highest level since November 8. The pound at 4pm on Tuesday was $1.2954 compared to $1.2889 at the previous close. A so-called “Trump-trade” had sent the greenback soaring after Mr Trump’s election victory, but those gains have since unwound.
The Dow Jones Industrial Average was down more than 1,100 points at one point yesterday (Image: Getty)
Nigel Green, CEO of global financial advisory giant deVere Group, told the Express: “The pound has climbed to its highest level since the , reflecting growing investor concerns over the fallout from Trump’s escalating trade war.
“With fresh tariffs targeting key trading partners—including Canada, Mexico, and markets are increasingly factoring in the risks of supply chain disruptions, slower global growth, US inflationary pressures and the risks of an American recession.
“For the UK, the implications are complex. On one hand, a weaker supports sterling by making UK assets more attractive to international investors. The prospect of a less dominant greenback could also lend support to the Bank of England’s efforts to manage inflation expectations.
“However, the broader economic uncertainty stemming from US protectionism could weigh on British exports.”
Mr Green said that investor positioning is already shifting, adding: “The dollar index has dropped to its lowest level since October and currency markets are signalling that more weakness may be ahead.
“For now, the pound is benefiting from the recalibration of capital flows, but risks remain. If trade policies push the US into a ‘Trumpcession’, the knock-on effects for global demand — and ultimately for sterling — could be significant.”
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Markets fear the potential impact of Donald Trump’s trade tariffs (Image: Getty)
Vasileios Gkionakis, a senior economist and strategist at UK fund manager Aviva Investors, told the there were a number of factors sending the euro higher.
This includes the unwinding of the Trump-tariff trade; a “seismic” shift in Germany’s fiscal stance, along with and a hawkish cut by the European Central Bank.
He said weaker-than-expected US economic data and a potential ceasefire in ’s war against are also having an influence on the European single currency, according to the senior economist.
Despite market jitters, Mr Trump appeared to double down on his protectionist stance on Tuesday, amid an intensifying trade war with the United States’ northern neighbour.
The US stock market fell after Mr Trump posted news of the increase on his Truth Social platform.