- Hassett reveals Trump is exploring legal options to remove Powell, reigniting concerns over the Fed’s political independence.
- DXY drops 1.09% to March 2022 lows as equities slump and investors flee the Greenback.
- CB Leading Index falls more than expected; US economic signals weaken amid rising trade and policy uncertainty.
The Pound Sterling (GBP) rallies sharply by over 0.70% on Monday as investors grew distrustful of United States (US) policymakers after White House Economic Adviser Kevin Hassett stated that President Donald Trump is seeking ways to sack Federal Reserve (Fed) Chair Jerome Powell. Consequently, traders penalize the Greenback, pushing GBP/USD close to the 1.3400 figure.
Pound rallies toward 1.34 as Trump eyes Powell firing, US Dollar crashes on Fed independence fears
The market mood turned sour as Washington threatened the Fed’s independence again. US equities are sinking, while the US Dollar Index (DXY), which reflects the buck’s value against a basket of six currencies including Cable, plummets over 1.09% to 98.31, levels last seen in March 2022.
Chicago Fed President Austan Goolsbee said he hopes the US does not move to an environment where the central bank's ability to set monetary policy independently of political pressure is questioned.
A scarce economic calendar witnessed the release of the US Conference Board (CB) Leading Index for March which declined -0.7% below forecasts of -0.5% to 100.5. Justyna Zabinska-LaMonica, Senior Manager, Business Cycle Indicators at The Conference Board, said, “The US LEI for March pointed to slowing economic activity ahead.” She added that the decline could be attributed to “soaring economic uncertainty ahead of pending tariff announcements.”
Across the pond, the UK economic docket is light, yet traders are eyeing the release of S&P Flash PMI final readings on April 23. In the US, Fed speakers would grab the headlines, and traders would eye S&P Flash PMIs.
GBP/USD Price Forecast: Technical outlook
GBP/USD uptrend remains intact, with investors eyeing a daily close above the September 26 high of 1.3434, which could set the stage to challenge 1.3450 ahead of buyers driving the exchange rate towards 1.35. It should be said that the Relative Strength Index (RSI) has turned overbought, but the slope has broken the last peak, an indication of buying pressure building.
Conversely, sellers need GBP/USD to remain below 1.3400 to remain hopeful of pulling the exchange rate below 1,3300, which is crucial to pave the way for a pullback. In that outcome, the next support would be April 18 low at 1.3248, followed by the 1.32 mark.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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
EUR/USD struggles to retain 1.1500 as USD gains traction
EUR/USD hovers around the 1.1500 level in the American session on Friday. The US Dollar surges despite dovish comments from Fed Governor Waller, supporting a rate cut as soon as July. The mood sours as investors weigh Middle East developments.
GBP/USD dives below 1.3500 after weak UK data, resurgent USD
GBP/USD turned red for the day and approaches the 1.3450 area as the week comes to an end. Earlier in the day, the UK reported weak Retail Sales figures, although the ongoing slump seems related to renewed risk aversion fueling safe-haven US Dollar demand.
Gold surges above $3,3360 as fears kick in
Gold gathers near-term momentum and trades near $3,370 ahead of the weekly close, as risk sentiment took a turn to the south. Following a positive start, Wall Street turned south. Middle East tensions and massive back-and-forth missile exchanges between Iran and Israel seem to be behind the ongoing run to safety.
Ripple Price Prediction: How tokenized treasuries could accelerate XRP to $10 by end-2025
Ondo Finance launched tokenized treasuries on the XRP Ledger in June, paving the way for seamless institutional adoption. The market capitalization of tokenized treasuries has grown to $5.9 billion despite market uncertainty over US tariffs.
Weekly focus: War and risk of escalation weigh on market sentiment
The war between Israel and Iran and the risk of further escalation weighed on markets this week. Equity markets largely traded in red and US treasury yields slid lower. That said, markets were by no means in full risk-off sentiment.
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.