- GBP/USD tumbles as Trump’s proposed tariffs on other industries raise fears of a trade war.
- US Dollar Index climbs 0.4% to 107.86, pressuring GBP/USD amid increased market risk aversion.
- US sees a significant drop in Durable Goods Orders and Consumer Confidence; inflation expectations rise.
The Pound Sterling extended its losses against the Greenback on Tuesday as US President Donald Trump threatened to impose tariffs on computer chips and other industries. Risk aversion extended for the second straight day, and the GBP/USD retreated from weekly highs of 1.2523, trading at 1.2432, down 0.50%
GBP/USD falls to 1.2432, down 0.50%, amid rising U.S. protectionist measures
On Monday, the Greenback recovered some ground, and most G8 FX currencies tumbled as Trump crossed the wires. He said he would impose duties on chips, pharmaceuticals, steel, aluminum, and copper if not produced in the United States (US). Therefore, the trade war is on, and traders keep the US Dollar bid.
The US Dollar Index (DXY), which tracks the buck’s value against a basket of six peers, rises 0.4% up at 107.86, a headwind for the GBP/USD. A further extension above DXY’s January 24 peak of 108.19 would exert further pressure on Sterling.
Source: Prime Market Terminal
Data-wise, US Durable Goods Orders plummeted --2.2 % MoM in December, missing the 0.6% increase expected by economists and worse than November’s -2% contraction.
Lately, the US Consumer Confidence revealed by the Conference Board slumped to 104.1, below the 105.6 foreseen by analysts. The report showed that all five components of the index deteriorated. Labor market conditions dropped for the first time since September, as Americans grew pessimistic about future employment prospects.
Of note is that the survey showed that inflation expectations rose from 5.1% to 5.3%.
In the meantime, traders eye the Federal Open Market Committee (FOMC) decision on January 29. The Federal Reserve is expected to keep rates on hold as it buys time to assess the impact of Trump 2.0's presidency and as prices remain stickier than expected.
GBP/USD Price Forecast: Technical outlook
The GBP/USD is downward biased, as buyers failed to push prices above the 50-day Simple Moving Average (SMA) of 1.2521. A daily close below the January 27 low of 1.2425 could pave the way for testing 1.2400. Once surpassed, the next stop would be the January 22 high at 1.2375.
Conversely, if GBP/USD rises above 1.2500, a test of the 50-day SMA is on the cards. Further upside is seen at 1.2575, the January 7 high.
British Pound PRICE Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.51% | 0.43% | 0.65% | 0.08% | 0.66% | 0.56% | 0.31% | |
| EUR | -0.51% | -0.08% | 0.13% | -0.43% | 0.15% | 0.05% | -0.18% | |
| GBP | -0.43% | 0.08% | 0.25% | -0.35% | 0.20% | 0.13% | -0.12% | |
| JPY | -0.65% | -0.13% | -0.25% | -0.59% | -0.01% | -0.13% | -0.36% | |
| CAD | -0.08% | 0.43% | 0.35% | 0.59% | 0.58% | 0.48% | 0.23% | |
| AUD | -0.66% | -0.15% | -0.20% | 0.00% | -0.58% | -0.10% | -0.34% | |
| NZD | -0.56% | -0.05% | -0.13% | 0.13% | -0.48% | 0.10% | -0.24% | |
| CHF | -0.31% | 0.18% | 0.12% | 0.36% | -0.23% | 0.34% | 0.24% |
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).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
Gold price jumps to fresh record high above $3,200 on US-China tariff war
Gold price sits at all-time highs of $3,219 in the Asian session on Friday. The weakening of the US Dollar and escalating trade war between the US and China provide some support to traditional safe haven asset Gold price amid increased dovish Fed expectations.
USD/JPY recovers losses in sync with US Dollar, retakes 143.50
USD/JPY is trimming losses to retest 143.50 in Asian trading hours on Friday, having tested levels under 143.00. The pair is tracking the US Dollar price action amid persistent trade jitters and US recession fears. The Fed-BoJ divergent policy expectations support the Japanese Yen, keep the weight intact on the pair.
AUD/USD consolidates weekly gains near 0.6250 despite trade tensions
AUD/USD consolidates weekly gains near 0.6250 in Asian trading on Friday. The pair capitalizes on sustained US Dollar weakness even as risk aversion remains at full steam on deepening US-China trade war. The White House confirmed on Thursdayt that the cumulative US tariffs on Chinese goods have risen to 145%.
Can Trump's tariff pause and declining inflation keep Bitcoin afloat? Experts weigh in
Bitcoin dived below $80,000 on Thursday despite US Consumer Price Index data coming in lower than expected and President Donald Trump's 90-day reciprocal tariffs pause on 75 countries.
Trump’s tariff pause sparks rally – What comes next?
Markets staged a dramatic reversal Wednesday, led by a 12% surge in the Nasdaq and strong gains across major indices, following President Trump’s unexpected decision to pause tariff escalation for non-retaliating trade partners.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.