- The Pound Sterling jumps to near 1.2375 against the US Dollar as Trump's tariffs on China are lower than feared.
- Trump threatens to impose 10% tariffs on China on February 1, lower than the 60% vowed in the election campaign.
- Investors expect the BoE to reduce interest rates by 25 bps in February.
The Pound Sterling (GBP) ticks higher to near 1.2375 against the US Dollar (USD) in Wednesday’s North American session. The GBP/USD pair gains as the US Dollar struggles to hold its two-week low, with the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trading cautiously around 107.90 as its safe-haven demand has moderated.
The USD’s safe-haven appeal has diminished as the tariff plans disclosed by the United States (US) administration under President Donald Trump are less fearful than what investors had anticipated in the election campaign. Trump said on Tuesday that he would impose 10% tariffs on China on February 1, the same day he vowed to slap 25% tariffs on other North American economies. In the election campaign, Trump threatened to impose 60% tariffs on China.
Market experts believe that tariffs would come in a more balanced way, due to which the risk premium of the US Dollar has diminished. A cautious tariff approach would also trim upside risks to inflation remaining persistent, weighing on firm expectations that the Federal Reserve (Fed) will keep interest rates at their current levels for longer.
According to the CME FedWatch tool, traders are confident that the Fed will keep its key borrowing rates in the range of 4.25%-4.50% in the upcoming three policy meetings.
Daily digest market movers: Pound Sterling gains against USD as investors start digesting Trump's tariff threats
- The Pound Sterling performs strongly against its major peers on Wednesday as market sentiment turns favorable for risk-perceived currencies amid ambiguity over Trump’s tariff plans. However, its outlook is still uncertain as the Bank of England (BoE) is almost certain to cut interest rates by 25 basis points (bps) to 4.5% in the policy meeting in February.
- Soft United Kingdom (UK) inflation and Retail Sales data for December, weak labor demand in three months ending November, and moderate Gross Domestic Product (GDP) growth have forced traders to price in a 25 bps interest rate reduction by the BoE next month.
- However, high wage growth is still a major concern for the BoE, given that wage pressures are the key driving force for inflation in the service sector. The Office for National Statistics (ONS) reported on Tuesday that Average Earnings Excluding Bonuses rose at a robust pace of 5.6%, faster than estimates of 5.5% and the former 5.2%.
- Going forward, investors will focus on the preliminary S&P Global/CIPS Purchasing Managers Index (PMI) data for January, which will be published on Friday.
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 | -0.14% | -0.09% | 0.25% | 0.07% | -0.16% | -0.01% | -0.08% | |
EUR | 0.14% | 0.05% | 0.41% | 0.20% | -0.03% | 0.12% | 0.05% | |
GBP | 0.09% | -0.05% | 0.35% | 0.15% | -0.08% | 0.07% | 0.00% | |
JPY | -0.25% | -0.41% | -0.35% | -0.18% | -0.42% | -0.29% | -0.34% | |
CAD | -0.07% | -0.20% | -0.15% | 0.18% | -0.24% | -0.09% | -0.15% | |
AUD | 0.16% | 0.03% | 0.08% | 0.42% | 0.24% | 0.15% | 0.09% | |
NZD | 0.01% | -0.12% | -0.07% | 0.29% | 0.09% | -0.15% | -0.07% | |
CHF | 0.08% | -0.05% | -0.00% | 0.34% | 0.15% | -0.09% | 0.07% |
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 rises close to 20-day EMA
The Pound Sterling strives to break above the 20-day Exponential Moving Average (EMA), which trades around 1.2360, against the US Dollar. The GBP/USD pair rebounded after posting a fresh over-one-year low of 1.2100 on January 13.
The 14-day Relative Strength Index (RSI) rebounds to near 43.50 from the 20.00-40.00 range, suggesting that the bearish momentum has ended, at least for now.
Looking down, the pair is expected to find support near the October 2023 low of 1.2050. On the upside, the round level of 1.2400 will act as key resistance.
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 accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.

GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.

Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.

Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.

Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.

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.