Pound Advances Against Majors

(RTTNews) - The British pound strengthened against other major currencies in the European session on Thursday, as investors neglect new tariffs imposed by U.S. President Trump on auto imports.

U.S. President Donald Trump ratcheted up transatlantic trade tensions by announcing a new 25-percent tariff on all auto imports.

In a late-night post on his Truth Social platform, Trump threatened to impose even steeper tariffs on the European Union and Canada if they collaborate to harm the U.S. economy.

European Commission President Ursula von der Leyen said she "deeply regrets" Trump's latest tariffs move. "The EU will continue to seek negotiated solutions, while safeguarding its economic interests," she said.

A softer-than-expected February UK Consumer Price Index (CPI) report and a cut to welfare benefits announced by Chancellor of the Exchequer Rachel Reeves in the Spring Statement caused the pound sterling to recover most of Wednesday's losses and trade higher against its major peers on Thursday.

Amid the uncertainty surrounding the crisis in Ukraine, Chancellor Reeves announced a £2.2 billion increase in defense spending, reiterated budgetary principles as non-negotiable, and kept his promise to not raise taxes. Reeves stated she would restore a budgetary buffer of around 10 billion pounds and promised to save £4.8 billion through amendments in welfare spending.

Traders focus on the speech by ECB President Lagarde for additional guidance, due later on the day.

The British sterling held steady against its major rivals in the Asian trading today.

In the European trading today, the pound rose to a 2-day high of 194.88 against the yen, from an early low of 193.56. The pound may test resistance around the 196.00 region.

Against the euro, the U.S. dollar and the Swiss franc, the pound advanced to 0.8334, 1.2929 and 1.1433 from early lows of 0.8350, 1.2877 and 1.1383, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.81 against the euro, 1.30 against the greenback and 1.16 against the franc.

Looking ahead, Canada Average Weekly Earnings for January, U.S. GDP growth rate for the fourth quarter, U.S. goods trade balance for February, U.S. weekly jobless claims data, U.S. core PCE price index for the four quarter and U.S. pending home sales for February are slated for release in the New York session.