GBP/USD surges on weak US ISM, yield drop
- Atlanta Fed GDP Now forecast weakens, raising recession worries.
- ISM Manufacturing PMI slips to 50.3 as Trump’s tariffs cloud economic view.
- UK 10-year GILTS yield climbs, while US 10-year T-note yield dips.
After a couple of days of dips, the British Pound Sterling (GBP) is bouncing back, gaining over 0.89% against a softer US Dollar (DXY). The Dollar had strengthened on Friday after a surprisingly weak Atlanta Fed GDP Now forecast for the first quarter of 2025 rattled markets. Currently, the GBP/USD pair is trading at 1.2694, recovering from an earlier low of 1.2577.
Pound rallies towards 1.2700 as US slowdown fears weigh on the Dollar
Recent economic figures suggest the US economy might be hitting the brakes. The latest ISM Manufacturing PMI revealed that business activity in February remained steady at 50.3. While still indicating expansion, this was a decrease from the previous 50.9 and fell short of economists’ predictions of 50.5. Adding to concerns, the ISM report highlighted that worries over potential tariffs from former US President Donald Trump are contributing to the less optimistic outlook within the manufacturing sector.
On a brighter note, data from S&P Global painted a slightly different picture, showing manufacturing activity in February actually expanding at a faster pace. Their figures came in at 52.7, up from 51.2 and above expectations of 51.6.
Meanwhile, in the United Kingdom (UK), the economic news calendar is relatively quiet. However, traders are looking ahead to Wednesday when Bank of England (BoE) Governor Andrew Bailey is scheduled to appear before the Treasury Select Committee, where his comments could provide fresh direction.
Another factor boosting the GBP/USD is the diverging paths of government bond yields. Yields on 10-year UK GILTS are on an upward trend, while yields on the benchmark US 10-year T-note have continued to decline. This dynamic has given the GBP/USD pair a lift, as buyers now have their eyes set on breaching the 1.2700 level.
Looking ahead in the US, market participants will be paying attention to a speech from St. Louis Fed President Alberto Musalem for further clues on the economic outlook and potential Federal Reserve policy.
GBP/USD Price Forecast: Technical outlook
The GBP/USD pair is currently showing a neutral to slightly positive bias. To confirm a stronger upward trend, buyers need to push through the recent high point of 1.2715. Clearing this level could pave the way for a test of the 200-day Simple Moving Average (SMA) at 1.2785, followed by the 1.2800 psychological mark. Conversely, if the pair loses momentum and falls below the 100-day SMA at 1.2631, it could open the door for a move down towards 1.2600.
British Pound PRICE Today
This table illustrates the percentage change of the British Pound (GBP) against other major currencies today. Notably, the British Pound has shown the strongest performance against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.11% | -0.94% | -0.21% | -0.29% | -0.60% | -0.51% | -0.59% | |
| EUR | 1.11% | 0.06% | 0.69% | 0.64% | 0.41% | 0.42% | 0.34% | |
| GBP | 0.94% | -0.06% | 0.74% | 0.59% | 0.36% | 0.36% | 0.28% | |
| JPY | 0.21% | -0.69% | -0.74% | 0.12% | -0.36% | -0.27% | -0.41% | |
| CAD | 0.29% | -0.64% | -0.59% | -0.12% | -0.17% | -0.23% | -0.30% | |
| AUD | 0.60% | -0.41% | -0.36% | 0.36% | 0.17% | 0.00% | -0.08% | |
| NZD | 0.51% | -0.42% | -0.36% | 0.27% | 0.23% | -0.00% | -0.08% | |
| CHF | 0.59% | -0.34% | -0.28% | 0.41% | 0.30% | 0.08% | 0.08% |
This heat map visualizes the percentage changes between major currencies. The currency on the left (base currency) is compared against the currency at the top (quote currency). For instance, looking at the intersection of British Pound (GBP) from the left column and US Dollar (USD), the displayed percentage reflects the change for GBP (base)/USD (quote).
