Pound (GBPUSD=X, GBPEUR=X)

The pound was higher against the dollar, up by 0.3% to $1.2852, following US president Donald Trump’s decision to pause tariffs for 90 days in a dramatic shift that offered some relief to jittery markets.

A possible relief rally in global equity markets, and prospect for stabilisation in the bond market, is fuel for the recovery of the pound on Thursday.

Trump blamed people “getting a little bit yippy, a little bit afraid” for the pause in global tariffs, after they triggered the most intense episode of financial market volatility since the early days of the Covid pandemic.

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But he denied making a U-turn, telling reporters that “you have to be flexible”.

The dollar extended its losses, with the dollar index (DX-Y.NYB), which measures the greenback against a basket of six currencies, losing 0.3% to 102.65.

In other currency moves, sterling was muted against the euro, trading at €1.1699.

Gold (GC=F)

Gold prices climbed as investors flocked to safe-haven bullion after the US hiked tariffs on China, the top metals consumer, escalating the already heated trade war, despite a 90-day pause on tariffs for other countries.

Gold futures gained 1.8% to $3,133.30 per ounce at the time of writing, while the spot price rose 2.3% to $3,113.63 an ounce.

Trump said on Wednesday that he would raise the tariff on Chinese imports to 125% from 104%. The world's two largest economies have engaged in a series of tit-for-tat tariffs over the past week.

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"If we enter a slow growth period, which is our base case, we think rates will eventually head lower and push gold higher since inflation worries will still be with us for much of the year due to tariff impacts," Marex analyst Edward Meir said.

"Eventually we do see $3,200 possibly by month-end, if not earlier."

Gold, widely viewed as a hedge against inflation and geopolitical uncertainty, has risen more than 18% so far this year.

Oil (BZ=F, CL=F)

Oil prices fell on Thursday as renewed hostilities in the US-China trade war unsettled markets, erasing much of the previous session’s rebound. The decline came despite a temporary pause in tariffs for most countries, as investors focused instead on the deepening rift between Washington and Beijing.

Brent crude prices lost 1.2% to $64.70 a barrel at the time of writing. US West Texas Intermediate (WTI) crude retreated by 2% to $61.14 a barrel.

The losses followed a volatile trading day on Wednesday, when both benchmarks had initially plunged as much as 7% before recovering to close around 4% higher on news of the tariff pause.