Sterling hits eight-month low against euro after Trump’s reciprocal tariffs

Published 07/04/2025, 13:14
© Reuters.

Investing.com -- The British sterling has dropped to its lowest level against the euro in nearly eight months, following the announcement of reciprocal tariffs by President Trump.

Analysts said that weakness is largely due to the high-risk status of the currency and market expectations that these tariffs could push the already vulnerable U.K. economy into a significant downturn. This could also lead the Bank of England to reduce interest rates more aggressively in 2025.

The euro increased by 0.7% to 0.8555, its highest since mid-August. The GBP/USD pair fell 0.7% to 1.2809.

In related news, the Canadian dollar has also experienced a downturn, reversing gains made last week after Canada managed to avoid new U.S. import duties included in President Trump’s reciprocal tariffs.

Despite the Canadian economy’s unique vulnerabilities to U.S. trade disruption and U.S. economic growth, the currency has largely remained stable.

The U.S. dollar rose by 0.3% to 1.4277 Canadian dollars, after reaching a four-month low of 1.4028 on Thursday.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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