Pound soars to 4-month high against US dollar as Donald Trump’s trade tariffs backfire

The pound has surged to a four-month high against the dollar as uncertainty grows over trade tariffs. Sterling climbed above $1.29 for the first time since November following the US president’s announcement of a one-month delay on tariffs for car manufacturers in Mexico and Canada.

The value of sterling has risen 3.9% since Trump first announced plans to impose tariffs in early February. An analyst at Trading Economics noted that the pound is now seen as “less vulnerable” to US tariffs, particularly after Trump suggested a potential trade deal with the UK that could help avoid new duties.

Kyle Rodda, an analyst at Capital.com, said US trade policy remains the “biggest uncertainty” for the markets, but the exemption for car makers from tariffs “supported hopes that rational heads prevail in the White House, and that even if trade relations don’t improve, at least they won’t get any worse.”

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