Pound Sterling Price News and Forecast: GBP/USD could correct lower if risk flows recede

FXStreet Team FXStreet

GBP/USD Forecast: Pound Sterling could correct lower if risk flows recede

Following a late Monday rally, GBP/USD preserved its bullish momentum on Tuesday and reached its highest level since January 2022 near 1.3650. The pair stays relatively quiet early Wednesday and fluctuates in a narrow band slightly above 1.3600.

Risk flows continued to dominate the action in financial markets in the first half of the day on Tuesday as investors cheered news of the Iran-Israel ceasefire. As a result, the US Dollar (USD) struggled to find demand and allowed GBP/USD to push higher. Read more...

GBP/USD overtakes 1.3600 as ceasefire uncertain, Powell tempers rate cut hopes

The Pound Sterling extended its gains versus the US Dollar on Tuesday, as the proposed ceasefire between Israel and Iran was violated by both parties, despite US President Donald Trump's warning. Nevertheless, the risk appetite remains strong, despite the ongoing developments in the Middle East. The GBP/USD trades above 1.3600, gaining over 0.65%, after printing a weekly high of 1.3626.

Aside from geopolitical risks, the Fed Chair Jerome Powell said in prepared remarks for his testimony at the US Congress, that rate cuts can wait, as the central bank studies the impact of tariffs on the economy. He stated that “tariffs this year are likely to push up prices and weigh on economic activity,” adding that the impact could be short-lived or persistent. Read more...

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