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GBP/USD climbs above 1.3100 on persistent USD weakness

  • GBP/USD builds on weekly gains and rises toward 1.3100 on Friday.
  • China's retaliation against heightened US tariffs put additional weight on the USD.
  • The US economic calendar will feature producer inflation data for March.

After closing the third consecutive day in positive territory on Wednesday, GBP/USD preserves its bullish momentum and rises about 1% on the day at around 1.3100.

The US Dollar stays under heavy selling pressure

The unabated selling pressure surrounding the US Dollar (USD) allows the pair to extend its weekly uptrend on Friday amidst escalating fears over the US-China trade conflict weighing on the US economic outlook.

China's Finance Ministry announced on Friday that they will raise additional tariffs on US imports from 84% to 125% from April 12, in retaliation to US President Donald Trump's decision to raise tariffs on Chinese goods.

The USD Index, which gauges the USD's valuation against a basket of six major currencies, was last seen fluctuating at its weakest level since April 2022 below 99.50.

Later in the session, the Producer Price Index (PPI) for March and the University of Michigan's preliminary Consumer Confidence Index data for April will be featured in the US economic calendar.

Investors will also pay close attention to fresh developments surrounding the US-China trade conflict heading into the weekend.

British Pound PRICE This week

The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-3.90%-1.71%-2.23%-2.62%-3.02%-4.12%-4.56%
EUR3.90%2.58%2.39%1.97%0.85%0.40%-0.07%
GBP1.71%-2.58%-1.46%-0.60%-1.68%-2.13%-2.59%
JPY2.23%-2.39%1.46%-0.36%0.15%-0.71%-2.05%
CAD2.62%-1.97%0.60%0.36%-0.75%-1.54%-2.26%
AUD3.02%-0.85%1.68%-0.15%0.75%-0.45%-0.92%
NZD4.12%-0.40%2.13%0.71%1.54%0.45%-0.47%
CHF4.56%0.07%2.59%2.05%2.26%0.92%0.47%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

US-China Trade War FAQs

Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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