Pound Sterling Price News and Forecast: GBP/USD could face challenges due to increased trade war tensions
|GBP/USD holds gains near 1.2450, downside risks appear due to hawkish Fed
GBP/USD remains steady after registering gains in the previous session, trading around 1.2450 during the Asian hours on Wednesday. However, the pair could face challenges as US President Donald Trump’s 25% tariff hike has increased trade war tensions.
Additionally, Fed Chair Jerome Powell’s cautious indication regarding the US policy outlook could provide support for the US Dollar (USD) and limit the upside of the GBP/USD pair. Powell said in his semi-annual report to Congress that the Fed officials “do not need to be in a hurry" to cut interest rates due to strength in the job market and solid economic growth. He added that US President Donald Trump's tariff policies could put more upward pressure on prices, making it harder for the central bank to lower rates. Read more...
GBP/USD recovers on general sentiment improvement
GBP/USD recovered ground on Tuesday, snapping a three-day losing streak and recovering back into touch range of the 1.2450 level, rising around two-thirds of one percent on the day. Global FX markets sold off the US Dollar slightly as risk appetite softly recovers across the board, bolstered by a steady-handed appearance from Federal Reserve (Fed) Chair Jerome Powell and and expectations that the latest iteration of US President Donald Trump’s tariff threats will be averted by last-minute concessions, as has been the pattern since Donald Trump took over the White House.
UK data remains thin through the midweek sessions, but Cable traders will be on the lookout for Thursday’s UK Gross Domestic Product (GDP) print. UK GDP is expected to show a recovery to an annualized 1.1% during the fourth quarter, though the Q4 GDP QoQ print is expected to come in at a -0.1% contraction. Read more...
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