Pound Sterling to Dollar Rate Rises on Legal Blow to Trump Tariffs

May 30, 2025 - Written by David Woodsmith

STORY LINK Pound Sterling to Dollar Rate Rises on Legal Blow to Trump Tariffs

The Pound-to-US-Dollar exchange rate (GBP/USD) edged higher on Thursday, recovering some ground after slipping to a weekly low late Wednesday.

At the time of writing, GBP/USD was trading at approximately $1.3466, marking a gain of around 0.3% since the start of the session.

The US Dollar (USD) initially looked poised to rally on Thursday, after appreciating overnight as traders reacted to a major court ruling targeting President Donald Trump’s flagship trade policies.

A federal court in New York determined that the Trump administration had overstepped its legal bounds by imposing broad reciprocal tariffs without sufficient congressional oversight. The ruling initially sparked a wave of optimism among USD investors, with hopes that a rollback in the controversial tariffs could ease trade tensions and benefit the US economy.

However, sentiment quickly shifted as markets began to focus on the financial fallout. If the ruling holds, it could lead to a meaningful drop in tariff revenue. Revenue that was expected to help partially offset the swelling US budget deficit. This prompted fresh concerns that the ‘One Big Beautiful Bill Act’ - Trump’s sweeping tax and spending plan - could drive the national debt even higher.

Uncertainty was further compounded by the White House’s decision to appeal the ruling, which cast doubt over whether any policy changes will be implemented in the near term.

The Pound (GBP) found moderate support on Thursday as broader market sentiment tilted in favour of riskier assets. The easing of US trade tensions, even if temporary, helped lift appetite for currencies like the Pound.


In addition, Sterling was supported by reports suggesting the UK is looking to fast-track trade talks with the US. This follows a joint announcement earlier in the month by Prime Minister Keir Starmer and President Trump, laying the groundwork for a potential UK-US trade agreement.

Expectations that the Bank of England (BoE) may hold off on cutting interest rates for now also continued to underpin the Pound, with investors speculating that the bank may take a more hawkish stance in the face of lingering inflation pressures.

Looking ahead, the next key catalyst for the GBP/USD exchange rate will be the release of April’s core PCE price index, the Federal Reserve’s preferred gauge of inflation.

Forecasts suggest a modest cooling, with the index expected to dip from 2.6% to 2.5%. Should the data confirm a continued easing of price pressures, it could bolster expectations that the Fed will move forward with a rate cut later this summer and weaken the US Dollar.

In contrast, the UK data calendar remains sparse through the end of the week. As a result, the Pound may take its cues from broader risk sentiment and cross-market dynamics.

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TAGS: Pound Dollar Forecasts