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GBP/USD rises as US Supreme Court blocks Trump's tariffs

  • GBP/USD climbs after the Supreme Court of the United States curbs tariffs backed by Donald Trump.
  • US GDP slows sharply, while core PCE jumps to 3%, signaling stagflation risks.
  • Diverging rate expectations between the Federal Reserve and the Bank of England cloud the near-term outlook.

GBP/USD edges higher by over 0.23% on Friday after the US Supreme Court ruled against President Donald Trump’s tariffs enacted under a law meant for use in national emergencies. This and a softer-than-expected Gross Domestic Product (GDP) report in the US weighed on the US Dollar (USD). The pair trades at 1.3494 at the time of writing.

Sterling gains after US court ruling dents the Dollar, while softer GDP offsets hotter core PCE

US economic data on Friday revealed a stagflationary picture as GDP in Q4 2025 decelerated from 4.4% to 1.4% YoY, sponsored by the disruptions from the 43-day government shutdown. At the same time, the US Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation gauge, jumped to 3% YoY in December, exceeding estimates of 2.9% and the prior print of 2.8%.

Following the data release, US equity markets edged lower but recovered on news that the US Supreme Court ruled that tariffs were illegal under the IEEPA without the approval of the US Congress. US Treasury Secretary Scott Bessent and other White House officials commented that the US would invoke other legal justifications to maintain as many of Trump’s duties as possible.

Following the SCOUT ruling, the Greenback edges lower as depicted by the US Dollar Index (DXY). The DXY, which measures the buck’s performance versus six major currencies, is down 0.14% at 97.67.

Across the pond, UK Retail Sales exceeded estimates of 2.8%, rising by 4.5% in January according to the Office for National Statistics (ONS). Business activity is also gathering pace as the S&P Flash PMIs in February expanded in both services and manufacturing.

Nevertheless, weaker-than-expected employment figures warrant further easing by the Bank of England, as the unemployment rate picked up in Q4 2025.

Money markets had priced in an 80% chance of a rate cut by the BoE in March. Meanwhile, traders pushed back the Federal Reserve’s first rate cut to June. Hence, the divergence of monetary policies between the US and UK central banks could pave the way for a pullback in GBP/USD before the ongoing uptrend resumes.

GBP/USD Price Forecast: Technical outlook

Chart Analysis GBP/USD

In the daily chart, GBP/USD trades at 1.3498. The Moving Average Triple slopes higher, maintaining a supportive backdrop. Price holds beneath the latest simple average near 1.3530, which caps immediate upside. The FXS Fed Sentiment Index has eased to 114.93, tempering follow-through momentum.

The rising trend line from 1.3035 underpins the bullish setup, with support tracked around 1.3528. A decisive close above that level would reinforce the advance, whereas failure to reclaim it would leave the pair confined to consolidation. With trend support nearby, a break would shift risk lower and expose a corrective phase.

(The technical analysis of this story was written with the help of an AI tool.)

Pound Sterling 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 Japanese Yen.

USDEURGBPJPYCADAUDNZDCHF
USD0.81%1.16%1.58%0.65%-0.01%1.05%0.95%
EUR-0.81%0.35%0.79%-0.13%-0.83%0.24%0.14%
GBP-1.16%-0.35%0.17%-0.51%-1.18%-0.11%-0.21%
JPY-1.58%-0.79%-0.17%-0.92%-1.55%-0.52%-0.57%
CAD-0.65%0.13%0.51%0.92%-0.70%0.41%0.31%
AUD0.00%0.83%1.18%1.55%0.70%1.08%1.01%
NZD-1.05%-0.24%0.11%0.52%-0.41%-1.08%-0.10%
CHF-0.95%-0.14%0.21%0.57%-0.31%-1.01%0.10%

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).

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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