Select Language

GBP/USD moves back closer to 1.3500 mark amid broadly weaker USD

Breaking news

GBP/USD moves back closer to 1.3500 mark amid broadly weaker USD

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.06.02 10:06
GBP/USD moves back closer to 1.3500 mark amid broadly weaker USD

update 2025.06.02 10:06

  • GBP/USD kicks off the new week on a positive note amid the emergence of fresh USD selling.
  • Fed rate cut bets and US fiscal concerns weigh on the USD amid trade-related uncertainties.
  • A weaker risk tone could limit losses for the safe-haven buck and cap the upside for the pair.

The GBP/USD pair regains positive traction at the start of a new week amid renewed US Dollar (USD) selling, though it remains below the 1.3500 psychological mark during the Asian session.

The Personal Consumption Expenditures (PCE) Price Index released on Friday pointed to further easing inflationary pressures in the US and bolstered the case for more policy easing by the Federal Reserve (Fed). Adding to this, concerns about the worsening US fiscal condition, fueled by the passage of US President Donald Trump's "Big Beautiful Bill," exert fresh downward pressure on the USD.

The British Pound (GBP), on the other hand, continues with its relative outperformance on the back of expectations that the Bank of England (BoE) would pause at its next meeting on June 18 and take its time before lowering borrowing costs further. This, in turn, is seen as another factor lending support to the GBP/USD pair. However, a weaker risk tone limits USD losses and might cap the pair.

The global risk sentiment took a hit after Trump stated on Friday that China is not committed to fulfilling the terms of the trade agreement reached in Switzerland. This comes on top of persistent geopolitical risk stemming from the Russia-Ukraine war and conflicts in the Middle East, which temper investors' appetite for riskier assets and could offer some support to the safe-haven Greenback.

Traders now look forward to this week's important US macro releases scheduled at the start of a new month, starting with the ISM Manufacturing PMI later this Monday. Apart from this, Fed Chair Jerome Powell's appearance will influence the USD price dynamics and provide some impetus to the GBP/USD pair.

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

 : 2025.06.02

Update

Last updated

 : 2025.06.02

Related articles


Show more

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?

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.

Most viewed

Fed's discount rate meeting minutes: Businesses are preparing staff reductions if costs rise

The Federal Reserve's (Fed) discount rate meeting minutes from April 7, 28, and May 8 revealed that policymakers are increasingly uneasy about looming economic impacts, mostly from US trade policy.
New
update2025.06.04 03:25

WTI Crude Oil extends gains as Canada wildfires, geopolitical tensions, and a broadly weaker US Dollar support prices

West Texas Intermediate (WTI) Crude Oil prices continue their upward trajectory on Tuesday, marking the second day of gains. At the time of writing, WTI is hovering near Monday's high, trading around $63.06 per barrel, reflecting a nearly 2% increase on the day.
New
update2025.06.04 02:36

Fed's Goolsbee: We could see a direct tariff effect on prices within a month

Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee fell in step with the Fed policymaker crowd on Tuesday, admitting that while things look good right now, policy uncertainty remains elevated at the hands of President Trump's whiplash tariff policies, and the Fed is beginning to brace f
New
update2025.06.04 02:24

Fed's Cook: Tariffs could lead to stagflation environment

Federal Reserve (Fed) Board of Governors member Lisa D. Cook noted on Tuesday that although the US economy appears to be in a healthy place for the time being, the biggest economic threat to stability remains the Trump administration's trade policies.
New
update2025.06.04 02:18

EUR/JPY rebounds off moving average support despite Eurozone inflation miss

The Euro (EUR) has been gaining strength against the Japanese Yen (JPY), traditionally seen as a safe haven, on Tuesday. 
New
update2025.06.04 02:02

Gold price falls over 1% as strong US jobs data lifts US Dollar

Gold price trims some of its Monday gains as it edges down over 1% on Tuesday following jobs data from the United States (US), which reveals that the labor market remains tight. At the same time, the overall strength of the Greenback weighed on the non-yielding metal.
New
update2025.06.04 01:42

EUR/GBP falls as Eurozone inflation reinforces dovish ECB expectations

The Euro (EUR) is suffering a setback against the Pound Sterling (GBP) on Tuesday, with prices falling to the 10-day Simple Moving Average (SMA) near 0.8415.
New
update2025.06.04 01:24

USD/CAD Price Forecast: USD/CAD bearish structure intact, short-term bounce hinges on 1.3700 support

The Canadian Dollar (CAD) holds firm against the US Dollar (USD) on Tuesday, with the USD/CAD pair edging lower during the American session to trade around 1.3710.
New
update2025.06.04 00:40

Fed's Bostic: The best approach for monetary policy is patience

Atlanta Federal Reserve President Raphael Bostic indicated that a robust economy provides the US central bank with the opportunity to consider the effects of tariffs on inflation and growth, while also expressing openness to the potential for a single interest rate cut later this year.
New
update2025.06.03 23:17

USD/JPY steadies ahead of US JOLTS data and potential clues on the health of the US labour market

The Japanese Yen (JPY) is edging lower against the US Dollar (USD) on Tuesday as market participants await the release of the US Job Openings and Labor Turnover Survey, scheduled for 14:00 GMT.
New
update2025.06.03 22:43

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.

  • 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
Cancel