GBP/USD depreciates as the US Dollar gains ground amid increased risk sentiment.
President Trump is preparing to announce a 50% tariff on imported copper and a 200% tariff on pharmaceutical imports.
The UK Office for Budget Responsibility warned that public finances are on an unsustainable long-term trajectory.
GBP/USD extends its losing streak, trading around 1.3580 during the Asian hours on Wednesday. The pair depreciates as the US Dollar (USD) gains ground amid increased risk aversion. On Tuesday, US President Donald Trump told reporters at a White House cabinet meeting to impose a 50% tariff on Copper imports but he did not say when the tariff would take effect, per Reuters.
President Trump expressed his intention to strengthen domestic Copper production and reduce dependence on foreign supplies, as the US currently imports nearly half of its metal, primarily from Chile. The new tariff aligns red metal with the existing 50% duties on steel and aluminum, intensifying trade tensions and adding to volatility in the metals market.
Moreover, US Treasury Secretary Scott Bessent said that the United States has already received around $100 billion in tariff revenue this year and could see that total surge to $300 billion by the end of 2025, driven by US President Donald Trump’s escalating trade measures.
The GBP/USD pair faces challenges as the Pound Sterling (GBP) loses ground due to concerns over the fiscal outlook in the United Kingdom (UK). The Office for Budget Responsibility (OBR) has warned that public finances are on an unsustainable long-term trajectory in the United Kingdom, given the growing cost of state pensions and the mounting climate emergency.
Richard Hughes, who chairs the budget watchdog, highlighted that public debt could surpass 270% of GDP by the early 2070s, driven by the financial strain of an aging population and rising healthcare and pension costs. Heightened global tensions and growing demands for higher defense spending are further contributing to long-term fiscal uncertainty.
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