GBPUSD Surges Past 1.3000 Amid Trade War Escalation
- China Hits Back with 125% Tariffs After US Escalates Duties to 145%; Beijing Dismisses Move as a “Joke”.
- US Consumer Sentiment Plummets to 50.8 as Inflation Expectations Soar.
- UK Economy Surprises with 0.5% Growth in February, Boosting Sterling Amid Global Uncertainty.
The Pound Sterling (GBP) continued its upward trend against the US Dollar (USD) as the escalating US-China trade war intensified, marked by Beijing’s imposition of hefty 125% tariffs on US goods. Trade tensions remain the primary market mover, overshadowing recent economic data. Currently, GBP/USD is trading at 1.3067, reflecting a 0.77% increase.
GBP/USD Surges 0.77% as Trade War Deepens and US Data Disappoints; Unexpected UK Growth Bolsters Sterling
Recent reports indicate China has retaliated against the US after President Donald Trump’s decision to raise tariffs on Chinese imports to 145%. Beijing dismissed the US action as a “joke,” stating they no longer felt compelled to match the increases.
Recent economic reports showed a significant downturn in US Consumer Sentiment, as measured by the University of Michigan. Their index fell from 57.0 to 50.8 in April. Adding to concerns, inflation expectations for the next year jumped to 6.7% from 5%, and for the longer term (five years), expectations climbed to 4.4% from 4.1%.
In other US economic news, the Producer Price Index (PPI) for March showed a decrease to 2.7% year-over-year, down from 3.2% and falling short of the anticipated 3.3%. However, Core PPI, which excludes volatile food and energy prices, remained elevated above 3% at 3.3% year-over-year. This was slightly lower than February’s 3.5% and below the projected 3.6%.
Simultaneously, remarks from Federal Reserve (Fed) officials offered insights into their perspectives. Minneapolis Fed President Neel Kashkari acknowledged some positive aspects in the latest CPI report but reiterated ongoing concerns about high inflation. Boston Fed President Susan Collins expressed her outlook for the year as one of persistent high inflation coupled with slower economic growth. Adding to the cautious tone, St. Louis Fed President Alberto Musalem suggested that inflation could potentially increase even if the labor market weakens.
In the UK, economic data provided a welcome surprise as the economy expanded by 0.5% in February. This growth exceeded economists’ forecasts and may offer some reassurance to Chancellor Rachel Reeves.
GBP/USD Price Forecast: Technical outlook
In the current environment, dominated by trade uncertainty, GBP/USD continues to hold above the 1.30 level. This position could pave the way for a retest of the six-month high reached on April 3rd at 1.3207. If this level is surpassed, the 1.3300 mark becomes the next target. Supporting this bullish outlook, the Relative Strength Index (RSI) indicates increasing buying momentum.
Conversely, should GBP/USD fall below 1.30, the first level of support is expected at the April 11th daily low of 1.2968. A break below this level could then lead to further declines toward 1.2900, followed by the 200-day Simple Moving Average (SMA) at 1.2815.
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 US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -3.23% | -1.27% | -1.38% | -2.44% | -3.04% | -3.57% | -4.63% | |
| EUR | 3.23% | 2.32% | 2.57% | 1.45% | 0.12% | 0.26% | -0.84% | |
| GBP | 1.27% | -2.32% | -1.05% | -0.85% | -2.12% | -2.01% | -3.09% | |
| JPY | 1.38% | -2.57% | 1.05% | -1.06% | -0.74% | -1.03% | -2.98% | |
| CAD | 2.44% | -1.45% | 0.85% | 1.06% | -0.95% | -1.15% | -2.51% | |
| AUD | 3.04% | -0.12% | 2.12% | 0.74% | 0.95% | 0.12% | -0.98% | |
| NZD | 3.57% | -0.26% | 2.01% | 1.03% | 1.15% | -0.12% | -1.10% | |
| CHF | 4.63% | 0.84% | 3.09% | 2.98% | 2.51% | 0.98% | 1.10% |
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).
