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GBP/USD Drops as Fed Governor Cook Hints at Fraud Charges and UK Inflation Picks Up

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  • August 20, 2025
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GBP/USD dropped on Wednesday as political theatre in the U.S. and higher-than-anticipated inflation data in the UK dented sentiment. Sterling lost ground even though UK CPI gained 3.8% YoY and Services CPI touched 5%, which reduced hopes for additional Bank of England rate cuts in the remainder of the year. Markets were shaken when reports broke out that Fed Governor Lisa Cook had falsified mortgage papers, and reports indicated that former President Trump is contemplating sacking her. The volatility of Fed policy, together with waning risk appetite, pulled GBP/USD below 1.3470 in the North American session. KEY LOOKOUTS • Accusations of U.S. mortgage fraud against Fed Governor Lisa Cook create uncertainty about U.S. monetary policy and shake market confidence. • CPI jumped to 3.8% YoY, with Services CPI at 5%, reducing expectations for further BoE rate cuts in 2025. • The pair slipped below 1.3470, with downside risks toward 1.3400 if sellers extend momentum. • Traders eye Fed meeting minutes, U.S. jobs data, and Powell’s Jackson Hole speech for fresh direction. GBP/USD slipped on Wednesday as traders weighed rising UK inflation against political turbulence in the U.S. Federal Reserve. The British pound first tested 1.3500 as warmer UK CPI data reported inflation at 3.8% YoY and Services CPI at 5%, reducing the expectations for additional Bank of England rate cuts this year. Risk sentiment turned sour later, though, following reports that Fed Governor Lisa Cook faked mortgage documents, with reports indicating former President Trump is mulling having her removed. The uncertainty regarding Fed policy direction and the consequent flight to safety drove GBP/USD as low as 1.3469 in the North American session. GBP/USD dipped below 1.3470 after UK inflation jumped but Fed drama undermined market sentiment. Charges against Fed Governor Lisa Cook of mortgage fraud and scaled-down BoE rate cut expectations contributed to volatility. Traders now look for direction from Fed minutes, employment data, and Powell’s speech at Jackson Hole. • GBP/USD dropped 0.15% to 1.3469 in the North American session. • UK CPI increased 3.8% YoY in July, Services CPI reaching 5%. • More inflationary heat reduced BoE rate cut probability in December from 50% to 42%. • Fed Governor Lisa Cook is accused of mortgage fraud, spooking markets. • Reports indicate former President Trump is deliberating on dismissing Cook. • Risk-off sentiment pressured Sterling despite robust UK data. • Traders await Fed minutes, U.S. employment data, and Powell’s Jackson Hole speech for new guidance. GBP/USD came under selling pressure on Wednesday as political instability in the U.S. recaptured headlines after the release of stronger-than-anticipated inflation data from the UK. There were accusations leveled against Fed Governor Lisa Cook, who stood accused of forging mortgage documents to obtain preferential loan conditions. The controversy escalated after reports suggested former President Trump is considering firing Cook, raising questions about the Federal Reserve’s independence and stability. This political drama weighed on market sentiment, driving investors toward safer assets and impacting currency flows between the Pound and the Dollar. GBP/USD DAILY PRICE CHART SOURCE: TradingView In the UK, hotter-than-anticipated inflation numbers were reported, with year-on-year Consumer Price Index increasing 3.8% and Services CPI hitting 5%. The more robust inflation reading lowered market expectations for additional Bank of England rate cuts over 2025, as policymakers might be compelled to take a more conservative approach. Even with supportive evidence for Sterling, investor interest was still focused on U.S. political events, which illustrates the way that international events can eclipse domestic economic performance in dictating market trends. TECHNICAL ANALYSIS GBP/USD’s recent move higher towards 1.3500 was fleeting, with sellers reasserting themselves after the pair broke above the 50-day SMA at 1.3495 before pulling back. The Relative Strength Index (RSI) is still in positive territory but is flattening, which indicates diminishing bullish momentum. A dip below 1.3450 may open the way for additional losses to the 20-day SMA at 1.3409 and the 100-day SMA at 1.3403. To the upside, continued strength above 1.3500 would enable purchasers to test the August 14 high at 1.3594, then the psychological 1.3600 barrier. FORECAST If GBP/USD is able to retake the 1.3500 resistance hurdle, buying pressure might return, propelling the pair towards the August 14 high of 1.3594. A convincing break above that level might unlock the psychological 1.3600 level, where greater resistance might be found. Encouraging U.S. data surprises or reduction in political pressures on the Federal Reserve might also increase investor optimism, supporting Sterling’s rally against the Dollar. Conversely, prolonged weakness below 1.3450 would be bearish and open up the pair for further losses. The sellers may aim the 20-day SMA of 1.3409, followed by the 100-day SMA of 1.3403, in case the downside momentum continues. Increased uncertainty regarding Fed Governor Cook’s future and overall risk-off mood may continue to weigh on GBP/USD, capping Sterling’s potential to gain from solid UK inflation data.

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Currencies GBP/USD

GBP/USD Approaches 1.3200 Before Significant UK Jobs and US Inflation Figures

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  • May 13, 2025
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GBP/USD pair rose towards the 1.3200 level in early European trading on Tuesday, buoyed by optimism in recent US-UK trade progress and the cautious policy-easing stance of the Bank of England. Optimism for the Pound was also encouraged by the upgraded UK growth prediction of the BoE and the measured interest rate cut approach by the central bank. Meanwhile, traders remain focused on upcoming high-impact data releases, including the UK employment report and the US Consumer Price Index (CPI) for April, which could influence the next moves of both the Bank of England and the Federal Reserve, potentially reshaping near-term direction for the currency pair. KEY LOOKOUTS •  Today’s UK jobs report is being followed closely by markets, which has the potential to shape expectations about the Bank of England’s upcoming policy actions and the health of the British economy. •  The US inflation data for April will be one of the prime drivers for the USD, and it has the potential to guide the Federal Reserve’s attitude toward interest rate reductions. A better-than-anticipated CPI might tighten the Greenback. •  The Pound is still underpinned by the Bank of England’s prudent stance on rate cuts and its revised UK growth forecast (1% vs 0.75%), which suggests optimism about economic resilience. •  Encouraging news from last week’s trade developments, including lower tariffs on British car and steel exports, is buoying sentiment towards the GBP and adding further support to GBP/USD. GBP/USD pair is trading close to 1.3200 as market participants wait for major macroeconomic data releases that could set the direction of the pair. Markets are looking towards the UK employment report, which may provide some guidance on the policy direction of the Bank of England after its cautious rate cut and revised growth forecast to 1%. At the same time, the April US Consumer Price Index (CPI), scheduled later today, may influence hopes regarding the next move by the Federal Reserve—especially if the inflation prints stronger than anticipated. Moreover, positive recent news for US-UK trade relations, such as lowered tariffs on UK car and steel exports, is still supporting the Pound. GBP/USD is trading around 1.3200 as markets look to pivotal UK jobs and US inflation figures later today. The Pound continues to be supported by the BoE’s conservative policy approach and enhanced UK growth prospects, with positive US-UK trade developments contributing to the upbeat mood. •   GBP/USD is near 1.3200 after early European session gains on Tuesday. •   UK job data later today may affect the direction of policy by the Bank of England. •  US release of April CPI is likely to direct the Federal Reserve’s future monetary policy action. •   BoE’s cautious rate reduction and improved growth estimate (from 0.75% to 1%) provide a boost to the Pound. •   US-UK trade updates, such as lowered tariffs on autos and steel, enhance GBP sentiment. •  Sentiment for GBP is positive as the BoE hints at a gradual policy-easing policy. •  A higher-than-anticipated US CPI may propel the USD and weigh on the GBP/USD pair. GBP/USD pair is gaining focus as market participants look to crucial economic news releases from both the UK and the US. Encouraging news in the trade relationship between the two countries, specifically the US move to lower tariffs on British steel and cars, has helped the Pound outlook improve. This follows the recent Bank of England policy revision, during which it opted for cautious treatment of rate changes while affirming faith in the UK economy’s strength by lifting its growth projection. GBP/USD DAILY PRICE CHART CHART SOURCE: TradingView Now the spotlight turns to forthcoming economic statistics, including the UK labor data and US Consumer Price Index (CPI) for April. These releases will help clear up further the economic health of both nations and the likely path of future monetary policy. As data remains top of mind for policymakers, the results of these releases are anxiously awaited by investors and pundits alike. TECHNICAL ANALYSIS GBP/USD is exhibiting bullish strength as it trades close to the 1.3200 resistance level. A persistent break above this psychological level could pave the way towards the next resistance area around 1.3250–1.3270. The pair is still underpinned by the 50-day moving average, and the RSI is trading close to 60, indicating there is still scope for further upside before it goes into overbought territory. But if it fails to breach 1.3200 convincingly, then a minor pullback might be initiated with initial support around 1.3130, succeeded by more firm demand at 1.3070. Traders will be looking for a clean breakout or rejection here as the upcoming UK and US data announcements may be the drivers for the next move. FORECAST If the next UK jobs data surprises to the upside and the Bank of England continues with its wary but accommodative tone, GBP/USD may continue to make waves. A good print from the labor market, in addition to ongoing confidence in UK growth and falling trade tensions with America, might propel the pair above the 1.3200 handle. A firm breach above this resistance would unlock the way to 1.3250 and even 1.3300 in the short term, particularly if US inflation statistics print softer than anticipated, reducing the US Dollar. On the other hand, a softer-than-anticipated UK jobs report or a hotter-than-anticipated US CPI reading may put significant downward pressure on GBP/USD. Sturdy inflation figures can rekindle hopes of extended higher interest rates by the Federal Reserve, increasing demand for the Greenback and pulling the pair down. A breakdown below 1.3130 would see the correction extending to 1.3070, with additional bearish pressure potentially extending to the 1.3000 psychological level if risk appetite worsens or the macro data severely underwhelms.

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AUD/USD Currencies

AUD/USD Slumps Close to 0.6300 in Face of Growing Risk Aversion and US Tariff Fears

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  • March 21, 2025
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The AUD/USD has fallen towards the 0.6300 level as risk aversion increases following increased concerns regarding US tariff policy, increasing the demand for safe-haven currencies like the US Dollar. The Australian Dollar is still on the back foot due to soft domestic jobs data, which is making traders revalue the Reserve Bank of Australia’s monetary policy perspective. As US bond yields fall as investors flock to Treasuries for safety, Fed Chair Jerome Powell conceded the difficulty in assessing the wider inflationary effects of tariffs even as he minimized their near-term impact. Cautious market sentiment prevails as economic uncertainties and changing central bank expectations remain at the helm of currency fluctuations. KEY LOOKOUTS • Safe-haven demand for the US Dollar could continue to weigh on AUD/USD amidst increasing geopolitical and economic uncertainty. • Market players closely monitor RBA’s policy, with lower jobs data fuelling speculation over possible rate reductions in the months ahead. • Future US releases of data, particularly inflation and employment, will be pivotal to influencing Fed policy expectations and USD direction. • Any intensification of US tariff news or overall risk sentiment would further fuel volatility and influence AUD/USD direction. The AUD/USD is still closely watched as several factors have been guiding its path. Increasing US Dollar demand amid surging risks aversion and US tariff policy concerns continues to press the key Australia Dollar. Meanwhile, weak Australian labor market statistics have prompted traders to re-evaluate the Reserve Bank of Australia’s policy tone, raising speculation of future rate cuts. Market players are also eyeing future US economic data, which might further affect Federal Reserve expectations and currency fluctuations. Changes in global sentiment or intensification of tensions relating to trade might contribute to volatility in the pair. AUD/USD remains around 0.6300 due to safe-haven demand pushing the US Dollar higher in light of increasing US tariff tensions. Downbeat Australian jobs data adds to the pressure, stoking speculation regarding future RBA rate cuts. Markets now look for major US economic indicators for guidance. • AUD/USD is trading around 0.6300, pressured by increasing risk aversion and increased US Dollar demand. • Safe-haven flows support USD, fueled by US tariff policy concerns and worldwide economic uncertainty. • US bond yields fall as investors turn to Treasuries for safety amid market and geopolitical uncertainty. • Fed Chair Powell minimizes inflation effect of tariffs, but admits difficulty in measuring broader economic impacts. • US Initial Jobless Claims increased to 223K, narrowly missing forecasts and contributing to risk-averse market sentiment. • Australian Dollar weakens after disappointing jobs data raise the alarm over the health of the labor market. • RBA policy outlook questioned, with markets speculating over future rate cuts despite the central bank’s conservatism. The Australian Dollar is facing pressure as global market sentiment shifts towards caution with increasing worries over US trade policies. Investors are now betting on the US Dollar as a safe-haven currency as anxiety rises about future economic shocks resulting from new tariffs from the US. This greater risk-aversion is fuelling currency market direction, and market participants watch closely for events in geopolitics and policy communications by large economies. Financial markets are more in defensive mood today, propelling demand towards defensive assets and impacting currency prices internationally. AUD/USD Daily Price Chart Chart Source: TradingView To this conservative mood comes the additional news of weaker-than-forecast employment figures from Australia. The unemployment rate having held steady, the fall in overall employment created renewed doubts about the vigor of the nation’s labor market. Consequently, market players are reviewing again the Reserve Bank of Australia’s policy path and more speculation about additional scope for cutting interest rates. Yet, the central bank has been cautious in tone, hinting at a cautious and data-driven policy in the next few months. TECHNICAL ANALYSIS AUD/USD is still under sustained bearish pressure, trading around the important psychological support level of 0.6300. The pair still trades below important moving averages, showing a consistent downtrend. Momentum indicators like the Relative Strength Index (RSI) also indicate a bearish bias, but not yet oversold, with scope for further decline. Any decisive break below 0.6300 could take the pair deeper into support levels, while any recovery attempt could be resisted around the 0.6350–0.6380 area. Traders are likely to observe these levels closely for possible breakout or reversal signals. FORECAST If sentiment in the market picks up and risk appetite comes back, AUD/USD may recover modestly. A recovery in global equities or a relief on US tariff concerns might dampen the safe-haven bid for the US Dollar, providing some relief to the Australian Dollar. Any surprise upside in Australian economic data or a more dovish tone from the Reserve Bank of Australia (RBA) could also induce a short-term rebound. In this case, the duo might try to retest resistance levels of 0.6350 and possibly 0.6380 if bullish sentiment gathers pace. On the bearish side, ongoing risk aversion and lingering worries about global trade tensions might keep AUD/USD under selling pressure. A strong US Dollar, supported by safe-haven flows and robust US economic data, might push the pair below the pivotal 0.6300 level. If this support is convincingly violated, subsequent falls toward 0.6250 or even 0.6200 cannot be discounted. Further, any subsequent indications of weakness in the labor market of Australia or dovish rhetoric from the RBA would bolster the bearish outlook for the Australian Dollar in the near term.

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