- The Pound Sterling rebounds to near 1.3475 against the US Dollar after Trump stated that China has violated trade agreement.
- A US federal appeals court temporarily puts on hold a lower court’s ruling against Trump’s tariffs.
- The US PCE inflation data for Apri has shown that inflationary pressures grew moderately.
The Pound Sterling (GBP) claws back some of its early losses against the US Dollar (USD) and recovers to near 1.3470 during Friday’s North American session. The GBP/USD pair rebounds as the US Dollar gives up a part of initial gains after a post from United States (US) President Donald Trump on Truth.Social signaled that trade tensions between Washington and Beijing have renewed.
"The bad news is that China, perhaps not surprisingly to some, has totally violated its agreement with us," Trump wrote.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, surrenders early gains and falls back to near 99.40.
Earlier in the day, the USD traded higher as US federal appeals court temporarily halted a federal trade court’s decision to block most of US President Donald Trump’s tariffs. The move hurt market sentiment due to renewed fears over how the impact of a trade war between the US and its main trade partners could hit growth.
On Wednesday, a US trade court ordered the permanent injunction of reciprocal, fentanyl, and border negligence-related tariffs in 10 calendar days for abusing the 1977 International Emergency Economic Powers Act (IEEPA). The court accused Trump of invoking “national emergency” to execute tariff policies, which should have been imposed with the approval of the Congress.
The appeal court, however, halted the ruling due to the government’s appeal and ordered the plaintiffs [US small businesses] in the cases to respond by June 5 and the administration by June 9, according to a report from the Firstpost.
On the economic front, the US Personal Consumption Expenditure Price Index (PCE) data for April has shown that inflationary pressures have cooled down. The US PCE inflation data rose at a slower pace of 2.1% on year, comapred to estimates of 2.2% and from 2.3% in March. In the same period, the core PCE inflation rose by 2.5%, as expected, moderately from the prior release of 2.7%.
Daily digest market movers: Pound Sterling remains almost stable against its peers
- The Pound Sterling trades calmly against its major peers on Friday. The British currency is expected to close May on a positive note against the US Dollar for the fourth straight month.
- Market expectations for a moderate policy-expansion cycle by the Bank of England (BoE) and the closure of trade deals with Washington, Delhi, and Brussels have helped strengthening the UK currency. While the US Dollar has remaiend under pressure due to Trump's tariff uncertainty.
- According to a report from Reuters, the futures market indicates that traders expect borrowing rates to fall by around 38 basis points (bps) by the end of this year, implying one 25 bps interest-rate cut and a roughly 50% odds of a second.
- On Thursday, BoE Governor Andrew Bailey guided a “gradual and careful approach” in cutting interest rates, citing that the economy is “hard to read”. Bailey cautioned about “strengthening inflation in food and other product categories”. On the employment front, Bailey said that the UK labour market data is pretty much “in line with our expectations” and the “slowing wage increase trend is still intact”.
- The major triggers behind traders paring BoE dovish bets are robust economic growth in the first quarter and, hotter-than-projected inflation.
- The International Monetary Fund (IMF) has slightly raised its UK GDP growth forecast for the current year to 1.2% from its prior estimate of 1.1%. The upward revision came on the back of upbeat Q1 Gross Domestic Product (GDP) data, which showed that the economy expanded at a robust pace of 0.7% compared to 0.1% seen in the last quarter of 2024.
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.20% | -0.03% | -0.33% | -0.12% | 0.26% | -0.03% | -0.10% | |
| EUR | -0.20% | -0.21% | -0.57% | -0.32% | 0.11% | 0.09% | -0.30% | |
| GBP | 0.03% | 0.21% | -0.35% | -0.09% | 0.33% | 0.13% | -0.07% | |
| JPY | 0.33% | 0.57% | 0.35% | 0.22% | 0.69% | 0.46% | 0.30% | |
| CAD | 0.12% | 0.32% | 0.09% | -0.22% | 0.47% | 0.21% | 0.02% | |
| AUD | -0.26% | -0.11% | -0.33% | -0.69% | -0.47% | -0.01% | -0.39% | |
| NZD | 0.03% | -0.09% | -0.13% | -0.46% | -0.21% | 0.01% | -0.38% | |
| CHF | 0.10% | 0.30% | 0.07% | -0.30% | -0.02% | 0.39% | 0.38% |
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 holds above 20-day EMA
The Pound Sterling rebounds to near 1.3470 against the US Dollar in Friday's North American session. The GBP/USD pair holds the key horizontal support plotted from the September 26 high of 1.3434 and rises to near 1.3500. The outlook of the pair remains firm as the 20-day Exponential Moving Average (EMA) slopes higher around 1.3395.
The 14-day Relative Strength Index (RSI) struggles to hold above 60.00. The bullish momentum would fade if the RSI slides into the 40.00-60.00 range.
On the upside, the January 13, 2022, high of 1.3750 will be a key hurdle for the pair. Looking down, the 20-day EMA will act as a major support area.
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.
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