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The British pound experienced its most significant single-day rise against the US dollar in over a year, climbing 1.1 per cent to reach $1.23. This surge came after reports emerged that the new US president would postpone his campaign promise to impose trade tariffs on “day one” of his presidency.
According to officials who spoke to The Wall Street Journal, President Trump’s initial approach will involve issuing a comprehensive memorandum directing federal agencies to examine trade policies and assess US trade relationships with China and neighbouring North American countries.
The positive market sentiment propelled the FTSE 100 to a fresh closing record of 8,520.54, representing a gain of 15.32 points or 0.18 per cent from the previous record. Though sterling retreated slightly from its peak, it maintained a robust position, closing nearly 1 per cent higher against the dollar.
The cryptocurrency market also witnessed significant movements, with Bitcoin reaching an unprecedented high of $109,000 before stabilising at $104,000. This surge followed Trump’s commitment to establishing a crypto-friendly administration and his ambitious pledge to transform the US into the “crypto capital of the planet”.
Market analysts remain cautious about the long-term implications. Nick Rees, head of macro research at Money Europe, expressed reservations about the market’s optimistic reaction, stating, “Markets seem to be taking comfort from a headline suggesting that day-one Trump tariffs are off the table. However, this confidence might be somewhat misplaced.”
The broader European markets responded positively to the tariff delay news, with Germany’s export-heavy Dax rising 0.42 per cent and Europe’s Stoxx 600 edging up 0.05 per cent. The commodities sector also benefited, with copper prices on the London Metal Exchange climbing 1 per cent to $9,286 per tonne, while gold prices increased 0.3 per cent to $2,708.29 per ounce, boosted by the weakening dollar.
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