Business

The pound has fallen against the dollar

The pound slipped against the dollar today, as fears of a trade war between the US and China waned.

The pound's value slipped to a low of $1.4077 just after midday, a fall of over one per cent. It was also down around against the euro, slipping to €1.137.

Heavy selling put pressure on the pound, while flows are also likely to be affected by the fact that the market is approaching the end of a quarter in a week shortened by holidays.

Meanwhile the dollar has rallied due to news indicating that tensions between the US and China may not escalate into a full-blown trade war.

US secretary of the treasury Steve Mnuchin and Chinese premier Li Keqiang have both indicated willingness to negotiate following Donald Trump's recent moves towards protectionism.

“Following recent volatility, Global markets have rallied as reports of trade talks between China and the US have proved to be supportive for stocks," commented Mihir Kapadia, chief executive of Sun Global Investments.

"Following a surge on Wall Street yesterday, European stocks opened strongly this morning following gains across Asia, as the prospect of trade war between the US and China cooled on the back of talks between the two countries."

Last week the pound rallied against the dollar as the prospect of a soft Brexit bolstered the currency's value, but today's decline has wiped off some of the gains of the past few days.

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