The FTSE 100 yesterday shrugged off global market jitters over Donald Trump's tariff plans as it climbed to a record closing high. The pound also stood firm amid choppy trading internationally to complete its best month against the dollar since September.
Bitcoin, meanwhile, extended its sell-off as it fell as low as $78,273, dipping below $80,000 for the first time in more than three months. The cryptocurrency is now 28 per cent lower than its all-time high of $109,071 on January 20. The oil price also came under pressure, with Brent crude dipping below $73 a barrel on a chaotic day for markets. It has come down from a recent high of more than $82 a barrel in January.
It came as investor hopes that Trump's tariff threats would fade were given a major jolt by comments on Thursday. The US President said mooted 25 per cent duties on Mexico and Canada would now come into effect next Tuesday – not on April 2 as he had suggested a day earlier.
He said goods from China would be subjected to an additional 10 per cent tariff, on top of the 10 per cent he has already imposed. Earlier this week he had floated placing 25 per cent tariffs on goods from the European Union. Markets around the world sold off with Japan's Nikkei turning 2.8 per cent lower and Hong Kong's Hang Seng sliding 3.3 per cent. European indices also turned red in early trading.
Chris Weston, head of research at broker Pepperstone, said: 'A market that had reduced its sensitivity to recent tariff headlines has had to reconsider.'. Stocks later fought back, with Germany's Dax, France's Cac 40 and Italy's FTSE MIB all ending higher on the day. And in London the FTSE 100 went from strength to strength, climbing 0.6 per cent, or 53.53 points, to 8809.74, a record closing high. The tariff threats have lifted the dollar in recent days.
But it was not enough to prevent the pound completing a strong February performance against the greenback. Last night it was slightly lower against the US currency on the day but nearly two cents higher at just under $1.26 versus the dollar on the month, the first increase since September.
Signs that the UK may escape Trump's tariff threats have boosted sentiment towards the UK. ING Bank analyst Chris Turner pointed to Prime Minister Keir Starmer's 'relatively warm relationship with Donald Trump' after the two men met in the White House this week.
'Whether the UK and the US can secure a new trade deal remains to be seen, but certainly the UK is less exposed to tariffs than its European counterparts,' Turner said. Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
