- GBP/USD clings to marginal daily gains above 1.2900 in the European morning.
- Downward revision to UK growth forecast and soft inflation data weighed on Pound Sterling.
- US economic calendar will feature weekly Initial Jobless Claims data.
Following a two-day recovery, GBP/USD turned south and lost about 0.5% on Wednesday. After dipping below 1.2900, the pair managed to correct higher early Thursday.
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 weakest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.53% | 0.05% | 0.83% | -0.40% | -0.51% | -0.12% | 0.11% | |
| EUR | -0.53% | -0.58% | -0.23% | -0.89% | -1.05% | -0.60% | -0.38% | |
| GBP | -0.05% | 0.58% | 0.78% | -0.93% | -0.50% | -0.01% | 0.10% | |
| JPY | -0.83% | 0.23% | -0.78% | -1.21% | -1.34% | -0.92% | -0.72% | |
| CAD | 0.40% | 0.89% | 0.93% | 1.21% | -0.05% | 0.28% | 0.51% | |
| AUD | 0.51% | 1.05% | 0.50% | 1.34% | 0.05% | 0.47% | 0.69% | |
| NZD | 0.12% | 0.60% | 0.01% | 0.92% | -0.28% | -0.47% | 0.29% | |
| CHF | -0.11% | 0.38% | -0.10% | 0.72% | -0.51% | -0.69% | -0.29% |
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).
Softer-than-expected inflation data weighed on Pound Sterling in the early European session on Wednesday. Later in the day, the UK's Office for Budget Responsibility announced that they revised down the Gross Domestic Product (GDP) growth forecast for 2025 to 1%, causing GBP/USD to stretch lower.
While presenting the Spring Budget, British finance minister Rachel Reeves noted that the global economy has become more uncertain and announced reductions to spending plans.
On Thursday, the US Department of Labor will publish the weekly Initial Jobless Claims data. Markets expect the number of first-time applications for unemployment benefits to rise to 225,000 from 223,000. A noticeable decline in this data could support the USD and force GBP/USD to turn south.
Meanwhile, markets adopt a cautious stance early Thursday following the latest remarks from US President Donald Trump on tariffs.
US President Donald Trump announced on Wednesday that they are planning to impose a 25% tariff on all car imports to the US. Trump further noted that auto tariffs will be permanent and go into effect on April 2. When asked whether the UK would impose retaliatory tariffs against the US, "We are not at the moment in a position where we want to do anything to escalate these trade wars," Reeves responded.
In case safe-haven flows dominate the action in financial markets in the second half of the day, GBP/USD could have a hard time holding its ground.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart stays slightly below 50 despite the latest rebound, highlighting a lack of bullish momentum.
On the downside, 1.2900-1.2890, where the lower limit of the ascending regression channel and the 20-day Simple Moving Average (SMA) are located, aligns as a key support level before 1.2800 (200-day SMA). Looking north, resistance could be seen at 1.2940-1.2950 (50-period SMA, static level), 1.3000 (static level, round level) and 1.3030 (mid-point of the ascending channel).
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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
AUD/USD edges lower below 0.6300 on global trade concerns
The AUD/USD pair trades in negative territory near 0.6280 during the early Asian session on Monday. The Australian Dollar weakens due to global trade concerns ahead of a planned announcement on Wednesday by US President Donald Trump on reciprocal tariffs.
USD/JPY weakens further below mid-149.00s; one-week low
USD/JPY retreats further from the vicinity of the monthly peak touched on Friday and attracts sellers at the start of a new week. Hawkish BoJ expectations and the risk-off mood amid rising trade tensions underpin the safe-haven JPY. Moreover, fears of stagflation in the US keep the USD bulls on the defensive and drag the pair to a one-week low.
Gold rises to near record high below $3,100 amid global uncertainty
Gold price gains momentum to around $3,090 during the early Asian session on Monday. The precious metal maintains its uptrend near a record high amid fears of a global trade war triggered by US President Donald Trump's latest tariffs.
Week ahead: US NFP and Eurozone CPI awaited as tariff war heats up, RBA meets
Trump’s reciprocal tariffs could spur more chaos. US jobs report might show DOGE impact on labour market. Eurozone inflation will be vital for ECB bets as April cut uncertain. RBA to likely hold rates; Canadian jobs, BoJ Tankan survey also on tap.
US: Trump's 'Liberation day' – What to expect?
Trump has so far enacted tariff changes that have lifted the trade-weighted average tariff rate on all US imports by around 5.5-6.0%-points. While re-rerouting of trade will decrease the effectiveness of tariffs over time, the current level is already close to the highest since the second world war.
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.