US-EU Auto Trade War: Impact on GBP/USD Exchange Rate? 🚗💰
The European Union (EU) expressed regret over the US decision to impose a 25% tariff on imported cars, while declaring it will protect its businesses and workers. This move by President Trump is forecasted to have the strongest impact on European car manufacturers, increasing trade tensions between the two regions.
In light of these fluctuations, the foreign exchange market has seen notable reactions. The British pound (#GBP ) continues to rise against the USD, with the GBP/USD exchange rate increasing from 1.21 to 1.30 in just the first three months of 2025 (according to data from #FXCE ). This reflects investor confidence in the UK's economic policy, especially in the context where the euro could face pressure if US-EU trade tensions escalate.
The US tightens trade policies, Europe faces difficulties, while the UK may benefit indirectly if investors turn to GBP as an alternative option in the European region. 💹
