- Pound (GBP) rises after 7 days of losses
- UK stops short of announcing retaliatory tariffs
- Euro (EUR) falls despite hopes of a Ukraine peace deal
- The EU announced retaliatory tariffs
The Pound Euro (GBP/EUR) exchange is rising, recovering after seven days of losses. The pair fell 0.22% in the previous session, settling on Tuesday at €1.1855. It traded in a range between €1.1832 and €1.1893. At 12:30 UTC, GBP/EUR is trading 0.18% at €1.1876.
The euro is falling against the pound and the US dollar, making it a busy day for news flow. On the one hand, Ukraine’s agreeing to a ceasefire presented by the US raised hopes of a rift between Russia and Ukraine. The deal will now be presented to Putin, with Trump likely to put pressure on the Russian leader to accept the proposal.
Elsewhere, the European Union announced retaliatory tariffs on the US. In response to the US tariffs on steel and aluminium, the EU announced €26 billion in countermeasures. In a tit for tat move.
ECB President Lagarde said that while disinflation was on track, global trade friction continues to pose a risk, making the inflation outlook more uncertain. Her comments come as the ECB could cut rates for a sixth time in March.
The pound is pushing higher despite the US applying trade tariffs on UK steel and aluminium imports. While UK Prime Minister Keir Starmer said he was disappointed by the move, the UK has not followed in the EU’s footsteps by announcing retaliatory measures.
The UK continues to pursue a possible economic deal with President Trump that would shelter it from future tariff levies.
The tariffs couldn’t come at a worse time as the steel industry battles high energy costs and weak demand. Exports to the US accounted for around 7% of total UK exports by volume last year.
The UK economic calendar remains quiet, and attention will turn to Friday’s GDP figures for further clarity on the health of the UK economy.