Forex News: Pound Rises Amid Optimism Ukraine Peace Plan

Pound Rises Amid Optimism Ukraine Peace Plan

(RTTNews) - The British pound strengthened against other major currencies in the European session on Monday, as investors react to the latest tariff news and Europe's peace efforts in Ukraine.

The British currency has also remained strong due to strong anticipation that the Bank of England (BoE) will maintain a mild policy-easing cycle and a likely positive trade agreement between the US and the UK.

U.S. Commerce Secretary Howard Lutnick on Sunday said that the tariffs on Mexico and Canada will go into effect as scheduled on Tuesday, but President Donald Trump will determine their exact levels before implementation.

Lutnick also indicated that an additional 10 percent tariff on Chinese imports remains on the table for Tuesday. China has already vowed to counter with all necessary measures.

Breaking his silence on the string of Trump's tariff announcements, legendary investor Warren Buffet has called them, "an act of war, to some degree" in an interview with CBS over the weekend.

After the collapse of a hoped-for deal between Trump and Volodymyr Zelenskyy, the European Union said it is ready to work with all European partners and other allies on a peace plan to Ukraine that will ensure a just and lasting peace for Ukrainian people.

Although a trade agreement was not reached during Thursday's meeting between US President Trump and UK Prime Minister Starmer, Trump expressed confidence that a deal could be reached "pretty quickly" in which tariffs "wouldn't be necessary."

Traders also shifted focus to the European Central Bank meeting due on Thursday, with economists expecting another 25-bps rate cut.

In the European trading today, the pound rose to a 4-day high of 1.2652 against the U.S. dollar, from an early low of 1.2582. On the upside, 1.28 is seen as the next resistance level for the pound.

Against the yen and the Swiss franc, the pound advanced to near 2-week highs of 190.97 and 1.1408 from early lows of 188.82 and 1.1343, respectively. If the pound extends its uptrend, it is likely to find resistance around 198.00 against the yen and 1.15 against the franc.

The pound edged up to 0.8252 against the euro, from an early low of 0.8267. The next possible upside target for the pound is seen around the 0.80 region.

Looking ahead, U.S. and Canada PMI for February and U.S. construction spending for January are set to be published in the New York session.

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