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Pound sterling recovers as Donald Trump's protectionism hits dollar | Pound sterling recovers as Donald Trump's protectionism hits dollar |
(about 2 hours later) | |
The pound recovered on Wednesday while the dollar fell, hit by fresh concerns of what US President Donald Trump’s policies would mean for global trade and markets. | The pound recovered on Wednesday while the dollar fell, hit by fresh concerns of what US President Donald Trump’s policies would mean for global trade and markets. |
Mr Trump, on Tuesday, told US chief executives of Ford, Fiat Chrysler and General Motors to build more vehicles in America, and renewed his pledge to build a wall along the border between the US and Mexico. The dollar lost ground following the remarks, leaving the pound around $1.2599, up 0.5 per cent on the day at its highest level against the buck since December. | Mr Trump, on Tuesday, told US chief executives of Ford, Fiat Chrysler and General Motors to build more vehicles in America, and renewed his pledge to build a wall along the border between the US and Mexico. The dollar lost ground following the remarks, leaving the pound around $1.2599, up 0.5 per cent on the day at its highest level against the buck since December. |
The pound had fallen on Tuesday, following a Supreme Court ruling that Britain's government must go through parliament before starting negotiations around leaving the European Union. | The pound had fallen on Tuesday, following a Supreme Court ruling that Britain's government must go through parliament before starting negotiations around leaving the European Union. |
Analysts largely attributed Wednesday’s move in the dollar to concerns about the protectionist stance Mr Trump has taken during his first few days in the White House. | Analysts largely attributed Wednesday’s move in the dollar to concerns about the protectionist stance Mr Trump has taken during his first few days in the White House. |
“We think the main reason Sterling is performing as it has done is the same reason other currencies are buoying against the US Dollar – The Trump factor,” analysts at foreign exchange service provider Hamilton Court said in a note. | |
Shusuke Yamada, an FX strategist at Bank of America Merrill Lynch, told the BBC: “We retain our view that the dollar is on a longer-term uptrend. But for the moment, scepticism towards the Trump presidency retains the upper hand.” | |
US stock markets had been broadly cheered by Mr Trump's election victory back in November, with hopes that an infrastructure spending boost and lower regulation and taxes would lift business. | US stock markets had been broadly cheered by Mr Trump's election victory back in November, with hopes that an infrastructure spending boost and lower regulation and taxes would lift business. |
However, Kathleen Brooks, the research director at City Index, said the initial reaction to the President’s first days in the office suggests investors “may be losing patience”. | |
She said investors were worried about “protectionism and what a deeply unpopular president will mean for national unity and international diplomacy over the next four years”. |
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