Daily Analysis: Markets on Edge as Trump's Tariff Plan Looms

Our daily analysis of EUR, GBP and USD.

DAILY ANALYSIS

USD

• Markets are on edge this morning as we wait for ‘liberation day’ to be unveiled by Trump later today, 4 pm UK time, where he plans to impose his ‘reciprocal’ tariffs on foreign countries. A sharp sell-off in the S&P 500 last night highlights the nervousness around tariffs that will be ‘effective immediately’.
• ADP Employment Change, the prelude to Nonfarm Payrolls, released this afternoon, forecast to increase to 105k versus 77k.
• USD is gaining traction this morning, making modest gains against its G3 counterparts.
  • GBP/USD hovers above 1.2900.

GBP

• Prime Minister Keir Starmer is hopeful the UK will be able to secure a trade deal with the US that will leave the country in a stronger position than the EU. A ‘term-sheet’ has been drawn up between the US and UK, but the Starmer administration still believes the tariffs will be imposed on the UK later today.
• GBP/EUR trades sideways at 1.1950.

EUR

• European leaders, like other leading nations, await with bated breath on how far the tariffs will go later today. Germany’s automotive industry is likely to be impacted heavily by the announcement later today. EU Commission president Ursula von der Leyen commented that the bloc already has a ‘strong plan to retaliate’, running the risk of an all-out global trade war.
• French far-right leader Marine Le Pen was sentenced to an immediate political ban for 5 years after her Rassemblement party was found guilty of embezzling €4.4mn of EU parliament funds.
• EUR/USD floats around the 1.0800 handle.

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