Pound Falls As European Shares Extend Losses On Growth Worries
The British pound weakened against other major currencies in the
European session on Friday, as European shares traded lower,
extending steep losses from the previous session after U.S.
President Donald Trump announced significantly
harsher-than-expected tariffs.
Investor sentiment remained fragile as U.S. President Donald
Trump’s reciprocal tariffs fueled concerns about inflation and
growth.
According to UBS, the latest tariff measures unveiled by Trump
may knock down U.S. economic growth by 2 percentage points this
year and raise inflation close to 5 percent.
However, Trump has downplayed the impact. “The markets are going
to boom, the stock is going to boom, and the country is going to
boom,” Trump said.
As growth worries mount, there is now increased speculation that
the Federal Reserve could accelerate interest rates to make it
easier for U.S. companies and households to borrow and spend.
Investors await the monthly U.S. jobs report as well as remarks
by Federal Reserve Chair Jerome Powell later in day for further
direction.
In the European trading today, the pound fell to a 2-1/2-month
low of 0.8472 against the euro, nearly a 1-month low of 189.84
against the yen and nearly a 3-month low of 1.1094 against the
Swiss franc, from early highs of 0.8434, 191.77 and 1.1251,
respectively. If the pound extends its downtrend, it is likely to
find support around 0.86 against the euro, 187.00 against the yen
and 1.10 against the franc.
Against the U.S. dollar, the pound edged down to 1.2976 from an
early high of 1.3114. The pound may test support near the 1.25
region.
Looking ahead, Canada and U.S. jobs data for March and U.S.
Baker Hughes oil rig count data are slated for release in the New
Yok session.
Markets in mainland China, Hong Kong and Taiwan closed for Tomb
Sweeping Day holiday.
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