Currency news / July 8, 2025

Tariff flip-flopping continues but losing oomph

3 min read Matthew Rush

Matthew RushJuly 8, 2025

Market snapshot:

Despite extensions Trump imposes reciprocal tariffs
Reserve Bank of Australia surprises markets and holds rates
TACO on the menu?

Currency recap

Trump extended the tariff deadline to 1st Aug, but announced some steep reciprocal tariffs, such as, 25% on Japan and South Korea, and 30% on South Africa. Other countries like Laos and Myanmar were dealt a stronger punch, facing a 40% levy, with Trump stating it wouldn’t be the last.

This time round, we haven’t seen the kind of reaction we did around "Liberation Day", suggesting that, perhaps, markets aren’t as sensitive to Trump's threats anymore. Nonetheless, the small dollar gains from last week retraced. When looking at equities, the S&P 500 hit fresh highs last week, dipped 0.8% and Wall Street fell 300 points.

Away from Trump, the Reserve Bank of Australia surprisingly left interest rates unchanged at 3.85%, commenting “it is appropriate to have a cautious, gradual stance on easing”. This resulted in the AUD climbing.

Read more about the Reserve Bank of Australia's interest rate decisions here - When is the next RBA interest rate decision?

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	0.80%	2.0862
GBPCAD	0.51%	1.8611
GBPCHF	0.42%	1.0855
GBPDKK	0.55%	8.6561
GBPEUR	0.49%	1.1603
GBPJPY	1.10%	199.269
GBPNOK	-0.30%	13.732
GBPNZD	0.76%	2.2677
GBPSEK	-0.77%	12.9457
GBPUSD	-0.44%	1.3636

*Daily move - against G10 rates at 7:00 am, 08.07.25
** Indicative rates - interbank rates at 7:00 am, 08.07.25

What we think

Despite the new tariffs causing some uncertainty, the TACO trade (Trump always chickens out) is still in play, as he granted a three-week reprieve for the impacted countries to negotiate. In spite of this, economies are feeling the heat after German exports to the US fell more than expected, therefore investors may start looking at the EUR strength and German Bunds slightly differently, turning their focus to the effect tariffs are having on major European countries' GDPs.

Today offers little scheduled data releases and all eyes will be on the retaliation/agreements with the US following hints that the EU is making progress in seeking a preliminary 10% rate before the deadline. India is also close to a trade deal.

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