The US dollar appreciated against the pound and euro following the US election results, which saw Donald Trump win the presidency.
- The dollar rose by 1.4% against the pound, reaching £0.777, highlighting market reactions to the election outcome.
- Alongside this currency shift, Trump’s proposed tariffs on imports have raised concerns about international trade impacts.
- UK political leaders expressed intentions to discuss potential economic implications with the newly elected US President.
- Senate majority win for Republicans aids Trump’s agenda on tax cuts and trade policies.
Following the recent US presidential election, the US dollar surged against the pound, appreciating by 1.4% to £0.777, and rising 1.8% against the euro to €0.931. This movement reflects market responses to Donald Trump’s successful bid for a second term in office. The election results have prompted fluctuations in currency values, impacting global economic dynamics.
The election not only secured Trump’s presidency but also saw Republicans gaining a majority in the Senate. This political shift could pave the way for Trump to enact planned economic policies, including the introduction of substantial tax cuts and the enforcement of tariffs on imported goods, a significant campaign promise.
Of particular concern are Trump’s proposed tariffs, suggesting a potential 10% tariff on all imported goods, escalating up to 60% for Chinese imports. The fashion industry, among others, is closely watching these developments given their substantial implications for supply chains and pricing.
In the UK, during Prime Minister’s Questions, opposition leader Keir Starmer highlighted the potential risks of increased tariffs on UK exports. He emphasised the importance of negotiating a free trade agreement with the US to mitigate these risks. Chancellor Rachel Reeves echoed this sentiment, underscoring the crucial nature of maintaining strong trade relations with the US.
Reeves expressed confidence in the continuity of UK-US trade flows under the Trump administration, signifying a proactive approach to preserving economic stability. This assurance comes as businesses brace for changes that a second term under Trump might introduce, weighing potential impacts on both currency strength and international trade agreements.
The US dollar’s recent rise highlights market reactions to political changes, as economic implications continue to unfold.
