By CITY & FINANCE REPORTER

Updated: 21:50 GMT, 7 March 2025

The pound and the Footsie went in different directions after Donald Trump set off a week of chaos on financial markets.

As investors grappled with the changing world order, sterling hit a four-month high above $1.29 against a US dollar left reeling by the President’s tariffs and fears of recession.

It rounded off the strongest week for the pound since November 2022. The euro climbed towards $1.09 in its best week against the greenback since 2009.

But the FTSE 100 fell 0.03 per cent, or 2.96 points to 8679.88 yesterday – taking losses for the week to 1.5 per cent. That was the worst performance of the year and came after the Footsie hit a record intra-day high of 8908 on Monday.

Contrasting fortunes: Sterling hit a four-month high above $1.29 against the US dollar, but the FTSE 100 fell 0.03 per cent to 8679.88

Contrasting fortunes: Sterling hit a four-month high above $1.29 against the US dollar, but the FTSE 100 fell 0.03 per cent to 8679.88

The rise in sterling and fall in shares came amid a rout on global bond markets that saw borrowing costs across Europe surge higher as the Continent set out plans to boost military spending.

German bunds were hit particularly hard – clocking up their biggest one-day increase since the fall of the Berlin Wall.

Neil Wilson, an analyst at TipRanks.com, said ‘a sense of chaos’ has gripped the markets as Trump flip-flops on tariffs and withdraws support for Ukraine.

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MARKET WATCH: Difference in fortunes for pound and Footsie

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