GBP/USD plunges below 1.2950 on risk aversion
|
- GBP/USD battered as China announces tariffs on US goods; Trump reacts aggressively.
- Strong US Nonfarm Payrolls were a tailwind for the US Dollar and drove the pair lower.
- Traders eyes on Fed Chair Powell speech.
The Pound Sterling (GBP) is tumbling sharply against the US Dollar (USD), falling more than 1% on Friday as risk appetite deteriorates after China announced tariffs on US goods, which triggered a reaction from US President Donald Trump. At the time of writing, GBP/USD trades at 1.2947 after hitting a daily high past the 1.31 mark.
Pound falls on market mood deterioration; BoE expected to cut rates three times in 2025
Earlier, China announced that it would impose tariffs of 34% on all US goods as retaliation for Trump’s decision. Sterling dropped as it is the most volatile currency amongst G10 currencies, as traders seeking safe havens bought the Greenback, the Japanese Yen and the Swiss Franc.
Data-wise, Nonfarm Payrolls for March in the US exceeded estimates of 135K, with figures rising to 228K, significantly surpassing February’s 151K. Although it was a positive number, the Unemployment Rate edged up from 4.1% to 4.2%, according to Bloomberg, which noted that “it was mostly a rounding error.”
British Pound bulls are eyeing a possible trade deal between the UK and the US. Despite this, market participants had fully priced in 75 basis points of easing by the Bank of England (BoE)
Up next, all eyes are on Federal Reserve (Fed) Chair Jerome Powell's speech. Next week, the UK economic docket will feature Gross Domestic Product (GDP) figures, along with housing data.
Across the pond, the US schedule Fed speakers, the latest Federal Open Market Committee (FOMC) minutes, and the release of inflation numbers on the consumer and producer side.
GBP/USD Price Forecast: Technical outlook
GBP/USD reversal witnessed on Friday could open the door to challenge the 1.2900 figure. A daily close below the latter will expose the 200-day Simple Moving Average (SMA) at 1.2810, followed by the 50-day SMA at 1.2726.
The Relative Strength Index (RSI) plunged sharply from around 70 to 54, an indication that bears are gathering strength.
On the bullish front, buyers must keep the pair above 1.29, ideally above April 3 low of 1.2968, which could pave the way to test 1.30.
British Pound PRICE This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.28% | 0.18% | -2.50% | -0.67% | 4.12% | 2.33% | -2.58% | |
| EUR | 1.28% | 1.59% | -1.19% | 0.67% | 5.54% | 3.70% | -1.25% | |
| GBP | -0.18% | -1.59% | -2.81% | -0.86% | 3.88% | 2.10% | -2.76% | |
| JPY | 2.50% | 1.19% | 2.81% | 1.88% | 6.84% | 5.02% | -0.14% | |
| CAD | 0.67% | -0.67% | 0.86% | -1.88% | 4.84% | 3.02% | -1.91% | |
| AUD | -4.12% | -5.54% | -3.88% | -6.84% | -4.84% | -1.71% | -6.43% | |
| NZD | -2.33% | -3.70% | -2.10% | -5.02% | -3.02% | 1.71% | -4.79% | |
| CHF | 2.58% | 1.25% | 2.76% | 0.14% | 1.91% | 6.43% | 4.79% |
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).
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.