- GBP supported by weaker USD as targeted tariffs ease global trade tension and lift sentiment.
- Traders brace for UK CPI and Reeves’ Spring Budget; any gilt market jitters could weigh on the Sterling.
- Fed officials cautious on inflation outlook, limiting US Dollar downside ahead of key PCE data release.
The Pound Sterling (GBP) is advancing against the US Dollar (USD) on Tuesday due to an upbeat market mood as traders are relieved of United States (US) reciprocal tariffs, which are expected to be targeted on some of the US trading partners. This weakened the Greenback as seen by GBP/USD trading at 1.2950, up 0.22%.
Sterling edges higher to 1.2950 amid calm markets, though looming inflation data and budget risks cap gains
The economic docket is empty on both sides of the Atlantic, with traders eyeing the release of United Kingdom (UK) inflation figures on Wednesday and the UK Spring Budget. The Consumer Price Index (CPI) in February is expected to dip from 3% to 2.9% YoY, while core figures are projected to cool from 3.7% to 3.6% in the twelve months to February.
The UK Chancellor of the Exchequer, Rachel Reeves, is expected to outline spending cuts and belt-tightening measures in the upcoming budget to meet the financial targets.
Francesco Pesole, currency strategist at ING, said, “There's a very fine line not to unnerve the gilt market,” which could knock confidence in the UK and weigh on the pound.
In the US, Federal Reserve (Fed) Governor Adriana Kugler stated the uptick in goods inflation is “unhelpful.” She said, “In certain subcategories, there is evidence that inflation reaccelerated in recent months,” adding that she’s paying close attention to inflation expectations.
Recently, New York Fed President John Williams stated that companies and households are experiencing heightened uncertainty about the future of the economy.
Even though both Fed policymakers struck a neutral tone, GBP/USD has failed to add to recent gains. Fears that inflation in the US could accelerate might prompt traders to buy the US Dollar due to lower chances that the Fed might reduce borrowing costs.
Ahead this week, the US economic docket will feature additional Fed speakers and the release of the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index.
GBP/USD Price Forecast: Technical outlook
GBP/USD has been consolidating near the 1.2900–1.2950 area for the past two days, with bulls remaining unable to decisively break above the 1.3000 level. In that outcome, the pair would resume its bullish bias and challenge November’s 2024 peak at 1.3047. Conversely, if sellers drive the exchange rate below 1.2950, the first support would be the March 24 swing low of 1.2885. A breach of the latter will expose the 200-day Simple Moving Average (SMA) at 1.2799.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.04% | -0.22% | 0.25% | -0.36% | -0.61% | -0.10% | -0.22% | |
| EUR | -0.04% | -0.37% | -0.32% | -0.36% | -0.67% | -0.10% | -0.22% | |
| GBP | 0.22% | 0.37% | 0.47% | -0.61% | -0.33% | 0.28% | 0.04% | |
| JPY | -0.25% | 0.32% | -0.47% | -0.61% | -0.88% | -0.34% | -0.49% | |
| CAD | 0.36% | 0.36% | 0.61% | 0.61% | -0.20% | 0.26% | 0.14% | |
| AUD | 0.61% | 0.67% | 0.33% | 0.88% | 0.20% | 0.59% | 0.46% | |
| NZD | 0.10% | 0.10% | -0.28% | 0.34% | -0.26% | -0.59% | -0.05% | |
| CHF | 0.22% | 0.22% | -0.04% | 0.49% | -0.14% | -0.46% | 0.05% |
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. 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 stays below 1.0800 after upbeat US data
EUR/USD struggles to gain traction and trades below 1.0800 in the American session on Wednesday. Upbeat February Durable Goods Orders data from the US support the US Dollar in the second half of the day, making it difficult for the pair to stage a rebound.
GBP/USD drops to fresh two-week lows below 1.2900
GBP/USD remains under pressure and trades at a fresh two-week low below 1.2900 in the American session on Wednesday. Soft February inflation data from the UK and the Spring Budget delivered by Chancellor Rachel Reeves weigh on Pound Sterling midweek.
Gold clings to modest daily gains above $3,020
Gold fluctuates in a relatively tight range and manages to hold above $3,020 midweek. The precious metal seems to be benefiting from the positive sentiment surrounding the commodities after Copper climbed to a new all-time high earlier in the day.
Bitcoin holds $87,000 as markets brace for volatility ahead of April 2 tariff announcements
Bitcoin (BTC) holds above $87,000 on Wednesday after its mild recovery so far this week. A K33 Research report explains how the markets are relatively calm and shaping up for volatility as the market absorbs the tariff announcements.
Sticky UK services inflation shows signs of tax hike impact
There are tentative signs that the forthcoming rise in employer National Insurance is having an impact on service sector inflation, which came in a tad higher than expected in February. It should still fall back in the second quarter, though, keeping the Bank of England on track for three further rate cuts this year.
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.