Select Language

GBP/USD extends losses to near 1.2350 amid risk-off mood following Trump's tariffs

blockHeadVisual
  1. HOME
  2. Get information
  3. World FX news
  4. GBP/USD extends losses to near 1.2350 amid risk-off mood following Trump's tariffs

World FX news

search
Breaking news

GBP/USD extends losses to near 1.2350 amid risk-off mood following Trump's tariffs

  • X
  • facebook
  • LINE
  • RSS
  • X
  • facebook
  • LINE
  • RSS
New update 2025.02.11 13:10
GBP/USD extends losses to near 1.2350 amid risk-off mood following Trump's tariffs

update 2025.02.11 13:10

  • GBP/USD depreciated as Trump expanded tariffs and nullified previous trade agreements with key US allies.
  • President Trump raised import duty on steel and aluminum imports to a flat 25% without exceptions or exemptions.
  • BoE's Mann stated that UK businesses may face difficulties in raising prices this year due to job losses.

GBP/USD continues its downward trend for the fourth consecutive day, trading near 1.2350 during Asian hours on Tuesday. The pair weakens amid escalating trade tensions after US President Donald Trump imposed a flat 25% tariff on steel and aluminum imports on Monday, removing all exemptions and nullifying previous trade agreements with key United States' (US) allies. The move is intended to support struggling domestic industries but increases the risk of a broader trade conflict.

Trump's proclamations raised the US aluminum tariff from 10% to 25%, eliminating country-specific exemptions, quota deals, and numerous product-specific exclusions for both metals. A White House official confirmed the new tariffs will take effect on March 4, with potential further measures targeting microchips and vehicles in the coming weeks.

Meanwhile, Bank of England (BoE) Monetary Policy Committee member Catherine Mann stated late Monday that United Kingdom's (UK) businesses may struggle to raise prices this year as job losses and weaker consumer spending dampen inflation, according to the Financial Times. Mann, who is scheduled to speak again, suggested that corporate pricing power is fading, reducing inflationary pressures. BoE Governor Andrew Bailey's remarks later on Tuesday will also be closely watched. 

In economic data, the British Retail Consortium (BRC) Like-for-Like Retail Sales in the UK increased by 2.5% year-on-year in January 2025, slowing from December's 3.1% gain but surpassing market expectations of 0.2%. BRC Chief Executive Helen Dickinson noted that while the performance remains strong, its sustainability in the coming months remains uncertain.

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.

 

Date

Created

 : 2025.02.11

Update

Last updated

 : 2025.02.11

Related articles

Show more

Writer

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?
No loading Yes loading

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Previous article

prev

Gold price retreats after hitting new record high; downside seems cushioned by Trump-related anxieties

Next article

Silver Price Forecast: XAG/USD trades with modest losses below $32.00; bullish bias remains

prev

Most viewed

EUR/USD consolidates ahead of Fed Powell's testimony

EUR/USD ticks higher but is broadly sideways around 1.0300 in Tuesday's European trading session as investors await the Federal Reserve (Fed) Chair Jerome Powell's testimony before Congress at 15:00 GMT.
New
update2025.02.11 19:27

Gold resumes its uptrend - Societe Generale

Gold resumed its uptrend after breakout from a multi-month consolidation and has reached $2940, Societe Generale's FX analysts report.
New
update2025.02.11 19:20

FXS Fed Sentiment Index retreats but remains in hawkish territory ahead of Powell testimony

Federal Reserve (Fed) Chairman Jerome Powell will testify on the semiannual Monetary Policy Report before the Senate Banking, Housing and Urban Affairs Committee at 15:00 GMT on Tuesday.
New
update2025.02.11 19:03

Oil: Energy complex is being pushed higher - ING

WTI is trading above $72/bbl while ICE Brent edged above $76/bbl this morning, ING's commodity analysts Warren Patterson and Ewa Manthey notes.
New
update2025.02.11 19:03

Jerome Powell Speech Preview: Fed chair to address Congress as markets seek for insight on monetary policy

Jerome Powell, Chairman of the United States (US) Federal Reserve (Fed), will deliver the Semi-Annual Monetary Policy Report and testify before the Senate Banking Committee on Tuesday.
New
update2025.02.11 19:00

AUD/USD consolidates near the top-end of the 0.6100-0.6330 range - BBH

AUD/USD is consolidating near the top-end of its year-to-date 0.6100-0.6330 range, BBH's FX analysts note.
New
update2025.02.11 18:59

Gold already at 11% return for 2025 with more tariffs coming, Fed Powell's testimony eyed

Gold's price (XAU/USD) has set another record high at $2,942 in early Tuesday trading before paring back nearly all the incurred gains for the day.
New
update2025.02.11 18:59

Gas trades at two-year high - ING

Gas prices in Europe are trading at their highest level in two years with the most active TTF futures moving above €58.5/MWh yesterday, ING's commodity analysts Warren Patterson and Ewa Manthey notes.
New
update2025.02.11 18:51

USD/CNH: Expected to trade between 7.3040 and 7.3240 - UOB Group

US Dollar (USD) is expected to trade between 7.3040 and 7.3240. In the longer run, outlook remains mixed, but USD is likely to trade in a narrower range of 7.2500/7.3300, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
New
update2025.02.11 18:47

Trump sets 25% tariffs on steel and Aluminum - ING

US President Donald Trump has set a 25% tariff on steel and Aluminum imports. The tariffs will apply to all US imports of steel and Aluminum, including from the country's biggest suppliers of both metals, Canada and Mexico. The duties will also include finished metal products.
New
update2025.02.11 18:43

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

arw
  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Line

Line
Facebook

Facebook
X

Twitter
Cancel