GBP Slips as Dollar Gains on Tariff Fears (07.14.2025)

Trump announced sweeping new tariffs, 30% on EU and Mexican imports and 50% on copper, fueling a global wave of risk aversion.

The euro slid to a two-week low at $1.165, while the Japanese yen gained ground as investors sought safe havens. Gold hovered near $3,350, buoyed by rising demand on mounting trade tensions, and silver soared to $38.85, its highest level since 2011, as copper substitution bets intensified. Meanwhile, the British pound struggled near 1.3500, pressured by both global trade fears and back-to-back GDP contractions that strengthened expectations of an August BoE rate cut.

Yen Climbs to 147 as Investors Seek Safety

The Japanese yen climbed toward 147 per dollar on Monday, regaining ground lost last week amid renewed trade worries. The gains came after Trump’s 30% tariff announcement on EU and Mexican imports, effective August 1. Both regions signaled ongoing talks with Washington in hopes of easing the terms.

Resistance is at 147.60, with major support at 146.15.

Gold Hovers Near 3-Week High on Demand

Gold hovered around $3,350 on Monday, near a three-week peak, supported by safe-haven buying after Trump’s 30% tariffs on the EU and Mexico. In letters to both, Trump called their trade deficits a "major threat" to U.S. security. EU and Mexico pushed back, calling the move unfair, though the EU will delay its countermeasures until early August as talks continue.

Resistance is at $3,365, while support holds at $3,330.

BoE Rate Cut Bets Rise as Pound Falters

GBP/USD hovered near 1.3500 in Asian trading, just above Friday’s three-week low, as sentiment remained bearish. A slight dollar pullback offered limited relief, but Trump’s 30% tariffs and broader trade actions, including a 50% copper duty, kept markets risk-averse.

UK economic data added to the pressure: GDP contracted 0.1% in May after a 0.3% drop in April, marking two months of decline. Industrial and manufacturing output also disappointed, raising expectations for a BoE rate cut in August.

Traders await key data this week, including CPI from both the US (Tuesday) and UK (Wednesday), along with remarks from BoE Governor Bailey and Fed officials.

Resistance is at 1.3500, while support holds at 1.3380.

Copper Tariff Fuels Silver Demand

Silver (XAG/USD) rallied to $38.85 on Monday, its highest level since 2011, as Trump’s surprise 50% tariff on copper imports triggered a rush into alternative metals. With silver widely used in electronics and green tech, rising copper prices could further increase demand.

Manufacturers may increasingly rely on silver, especially in the solar and EV sectors, while tight supply adds to the upside. The Silver Institute expects another market deficit this year, reinforcing bullish sentiment.

However, gains could face resistance if the Fed maintains its current policy stance. A stronger dollar, should inflation concerns grow, could dampen foreign demand for silver.

Resistance is at 39.50, while support holds at 38.50.