ExchangeRates.org.uk - The Pound Euro (GBP/EUR) exchange rate edged lower on Tuesday following the announcement of Trump’s proposed tariff plans.The Euro (EUR) managed to strengthen against the majority of its peers on Tuesday following the announcement of Donald Trump’s latest tariff plans for America.
Following Trump’s victory less than a month ago, EUR exchange rates slipped as market fears that Trump could impose new tariffs on Europe undermined the common currency.
However, Trump has announced a proposed 25% tax on products coming into the US from Canada and Mexico, shaking markets once again.
However, as Trump’s initial plans failed to mention Europe, EUR exchange rates climbed against its rivals on Tuesday.
Chris Turner, Global Head of markets at ING, commented via a published note and said: ‘That Europe was not mentioned in Trump’s first tariff post could perhaps be welcome news on the continent.’
The Pound (GBP) saw mixed performance against most currencies on Tuesday, strengthening against the Canadian Dollar (CAD) and the US Dollar (USD), dipping against the Euro, but remained largely unchanged elsewhere.
The scarcity of significant UK data releases coupled with a cautious market mood constrained the British currency's movement.
With limited UK data to drive direction, GBP exchange rates were predominantly influenced by market risk appetite.
Given the Pound's growing sensitivity to risk, Tuesday's apprehensive trading environment kept Sterling mostly flat during the European session.
GBP/EUR Forecast: Eurozone Data in the Spotlight?
Looking forward, the primary driver of movement for the Pound Euro exchange rate looking ahead to Wednesday will likely be the publication of Germany’s latest GFK consumer confidence data.
Should the latest index confirm another negative consumer sentiment reading in the Eurozone’s largest economy, the single currency will likely dip during mid-week trade.
Turning to the Pound, UK data will once again be absent from Wednesday’s data calendar and will likely see GBP exchange rates continue to trade in line with market mood.
Will a shift to upbeat trading conditions be enough to bolster GBP exchange rates?
Or will markets remain anxious and in turn see Sterling remain on the back foot?
This content was originally published on ExchangeRates.org.uk