Pound Sterling rises against US Dollar while investors await Trump's tariff plan
- The Pound Sterling gains to near 1.2940 against the US Dollar, while US President Trump is scheduled to unveil the reciprocal tariff plan.
- Trump’s tariff agenda is expected to address unfair practices by his trading partners.
- Easing UK wage growth momentum could pave the way for more BoE interest rate cuts.
The Pound Sterling (GBP) rises to near around 1.2950 against the US Dollar (USD) in Wednesday’s North American session. The GBP/USD pair gains as the US Dollar faces selling pressure ahead of the release of a detailed reciprocal tariff plan by United States (US) President Donald Trump later in the day. The US Dollar Index (DXY), which gauges the Greenback's value against six major peers, drops to near 104.00.
US President Trump has been touting April 2 as “Liberation Day” for weeks as he believes that the imposition of reciprocal tariffs will make “America great again”. Trump’s reciprocal tariffs are expected to upend the global trade system soon, as White House spokeswoman Karoline Leavitt signaled on Tuesday that fresh levies will become effective immediately after the announcement.
Market sentiment is expected to become excessively risk-averse if the degree of import duties comes in higher than expected. A note from the Washington Post on Tuesday showed that the White House aides have drafted a proposal to impose 20% tariffs on most imports to the US. Also, US Treasury Secretary Scott Bessent said on Tuesday that the President will sweep the highest possible levies on his major trading allies. Bessent suggested that tariffs on targeted countries could be diminished if they ease trade and non-trade barriers for imports from the US.
Donald Trump is expected to distribute the tariff collection to households through tax dividends or refunds. Such a scenario will be inflationary for the US economy, forcing the Federal Reserve (Fed) to maintain a restrictive monetary policy stance in the near term.
During North American trading hours, the ADP has reported strong private employment data for March. The agency showed that private employers added 155K fresh workers, significantly higher than estimates of 105K and the former release of 84K.
Daily digest market movers: Pound Sterling trades cautiously ahead of Trump’s tariffs plan
- The Pound Sterling trades with caution against its major peers on Wednesday. The British currency struggles as investors turn risk-averse ahead of Trump’s reciprocal tariff announcement. Market participants expect that Trump's new suite of levies will weigh on global economic growth, assuming that the imposition of higher duties by the US on its trading partners will make their products less competitive in the global market.
- The United Kingdom (UK) economy will also bear the burden of uncertainty in the global market. The UK Office for Business Responsibility (OBR) warned on Monday that Trump’s policies could wipe out the government fiscal buffer and cut the economy’s size by as much as 1%.
- Additionally, a delay in negotiations between the US and the UK over finalizing an economic deal beyond “Liberation Day” has also stemmed concerns over the outlook of trade relations between them. There is a high chance that the terms and conditions of the potential economic deal could change after the reciprocal tariff announcement.
- Meanwhile, cooling wage growth pressures are expected to uplift Bank of England (BoE) dovish bets. The Incomes Data Research (IDR) reported on Wednesday that the median pay rise grew by 3.5% in the three months to February, slower than the prior release of 4%. This was the lowest level seen in three years. It seems that employers refrain from awarding fat hikes to compensate for the increase in contributions to social security schemes. In the Autumn Statement, Chancellor of the Exchequer Rachel Reeves raised employers’ contribution to National Insurance (NI) from 13.8% to 15%.
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 Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.30% | -0.17% | -0.31% | 0.13% | -0.42% | -0.77% | -0.16% | |
| EUR | 0.30% | 0.15% | 0.00% | 0.44% | -0.11% | -0.49% | 0.15% | |
| GBP | 0.17% | -0.15% | -0.12% | 0.31% | -0.25% | -0.60% | 0.02% | |
| JPY | 0.31% | 0.00% | 0.12% | 0.43% | -0.14% | -0.51% | 0.12% | |
| CAD | -0.13% | -0.44% | -0.31% | -0.43% | -0.55% | -0.90% | -0.29% | |
| AUD | 0.42% | 0.11% | 0.25% | 0.14% | 0.55% | -0.36% | 0.26% | |
| NZD | 0.77% | 0.49% | 0.60% | 0.51% | 0.90% | 0.36% | 0.62% | |
| CHF | 0.16% | -0.15% | -0.02% | -0.12% | 0.29% | -0.26% | -0.62% |
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).
Technical Analysis: Pound Sterling stays above 20-day EMA
The Pound Sterling edges higher to near 1.2940 against the US Dollar on Wednesday. The GBP/USD pair continues to wobble around the 61.8% Fibonacci retracement, plotted from late-September high to mid-January low, near 1.2930. The 20-day Exponential Moving Average (EMA) provides support to the pair around 1.2890.
The 14-day Relative Strength Index (RSI) cools down to near 60.00 after turning overbought above 70.00. Should a fresh bullish momentum come into action if the RSI resumes the upside journey after holding above the 60.00 level
Looking down, the 50% Fibonacci retracement at 1.2770 and the 38.2% Fibonacci retracement at 1.2615 will act as key support zones for the pair. On the upside, the October 15 high of 1.3100 will act as a key resistance zone.
Economic Indicator
ADP Employment Change
The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Last release: Wed Apr 02, 2025 12:15
Frequency: Monthly
Actual: 155K
Consensus: 105K
Previous: 77K
Source: ADP Research Institute
Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
