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Currencies GBP/USD

GBP/USD Remains at Two-Week Highs as Risk-On Mood Bolsters Sterling; UK PMI Figures in the Spotlight

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  • July 24, 2025
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GBP/USD remains close to two-week highs at 1.3580 in a generally softer US Dollar and a risk-on market mood that is bullish. Supportive risk-on sentiment stems from hopes for emerging trade deals between the US and major trading partners like the European Union and Japan that have lifted investor mood. In the meantime, future UK economic releases—especially the S&P PMI and Retail Sales—are in focus and can determine the next direction of the pair. Traders are also eyeing Bank of England policy advancements, as expectations for 2025 rate cuts modestly ease. KEY LOOKOUTS • Thursday’s release should indicate slight manufacturing and services recovery, which can boost GBP sentiment. • The currency is still supported by wider USD softness under risk-on sentiment and decaying Fed-related fears. • US-EU and US-Japan trade pact progress may impact overall market tone and risk appetite. • Traders are also looking for further clues on BoE’s rate trajectory and GILTS sales interruption amid subdued demand. GBP/USD is holding firm around 1.3580, underpinned by better global risk sentiment and a weaker US Dollar. Expectations of a breakthrough in US trade talks with the European Union and Japan have buoyed market sentiment, supporting the Pound to hold onto gains. Investors are monitoring Thursday’s UK S&P PMI figures closely, which may provide new insight into the condition of the UK economy. Also, speculation concerning the policy stance of the Bank of England and the temporary halt in long-term GILTS sales provides further interest for traders looking to determine the Sterling’s short-term direction. GBP/USD is close to two-week highs in light of widespread US Dollar weakness and enhanced risk appetite. GBP/USD awaits UK PMI releases and BoE policy cues for the next move. • GBP/USD is close to 1.3580 support, remaining near two-week highs in Asian trading hours. • Decreasing US Dollar provides a more than welcome boost to the pair as risk-on moods dominate global markets. • US-EU trade negotiations and agreement of a 15% tariff with Japan boost morale. • UK S&P PMI releases on Thursday may offer some new economic indications. • Friday’s UK Retail Sales will likely bounce back with the support of improved weather. • BoE stops GILTS sales temporarily due to scarce demand from pension schemes. • Rate cut hopes for 2025 have eased slightly but continue to be in the view. GBP/USD remains a focus as the global market mood has improved, with investors optimistic about possible trade deals between the United States and major global partners such as the European Union and Japan. The news about the US and EU getting closer to a deal with 15% tariffs on EU products, while also recently agreeing to a tariff deal with Japan, has increased optimism regarding more seamless global trade relations. This wider optimistic sentiment across world markets is supporting risk-sensitive currencies like the British Pound, assisting it to remain strong against the US Dollar. GBP/USD DAILY PRICE CHART SOURCE: TradingView In the UK itself, market operators are keeping a keen eye on forthcoming economic data releases, particularly the S&P PMI numbers due out on Thursday. These are forecast to show modest gains in manufacturing as well as the services sector, providing a hint about how well the UK economy is doing. Retail sales figures out Friday, meanwhile, may indicate a pickup, fueled in part by seasonal weather patterns. The Bank of England’s recent decision to suspend long-term GILTS sales is also indicative of changing market forces, with conventional buyers taking little interest. All of these trends are influencing UK monetary policy expectations among investors heading into 2025. TECHNICAL ANALYSIS GBP/USD is trading firmly close to the 1.3580 level, holding its ground near a two-week high. The pair is holding above important moving averages, reflecting underlying short-term bullish momentum. If the price holds above the 1.3550–1.3560 support area, it may set the stage for a rally towards the psychological resistance point at 1.3600 and possibly higher. Any inability to hold above the near-term support, though, might tempt marginal pullbacks, although the bigger picture trend is positive as long as the pair remains over its recent breakout levels. FORECAST If the current risk-on mood continues and UK economic data comes in as strong as, or better than, expected, GBP/USD would potentially push its gains to the 1.3600 psychological resistance and beyond. Sustained positive surprises in the coming S&P PMI and Retail Sales numbers would have a good chance of solidifying confidence in the UK economy, providing further impetus for the Pound. Also, sustained weakness in the US Dollar, fueled by better global trade prospects and calm investor attitude, may deliver the needed tailwinds for the pair to continue on the upswing. Conversely, any UK macroeconomic data disappointment or abrupt change of mood in the market toward risk aversion may prompt a retreat in GBP/USD. If investors become increasingly worried about future Bank of England rate action timing or effects or if geopolitics interrupts US trade talks, the pair could come under pressure. A close below the 1.3550 support level might pave the way for more significant corrections, particularly if the US Dollar starts gaining ground on better home stimuli or more aggressive Fed rhetoric.

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Currencies GBP/USD

GBP/USD Dips below 1.3300 as UK Confidence Fades and USD Gains in Tariff Shift Talks

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  • April 25, 2025
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GBP/USD exchange rate dipped below the 1.3300 level in Friday’s Asian session under pressure from a mix of damped UK consumer confidence and US Dollar strength. Pound Sterling was put under pressure after April’s GfK Consumer Confidence index fell to -23, its lowest level since November 2023, on the back of increased living expenses and international trade uncertainty. At the same time, the Greenback picked up strength after news came out that China might put its 125% tariffs on certain US imports on hold, propelling market expectations of US trade talks. Though US Initial Jobless Claims just missed forecasts at 222,000, general sentiment is still in favor of the USD leading up to key data releases throughout the day. KEY LOOKOUTS • Market participants are particularly focused on the forthcoming UK Retail Sales announcement, which has the potential to provide new data on consumer activity and shape short-term Pound movements. • This prominent indicator will assist in determining US consumer confidence and potentially drive expectations of Fed policy, influencing the USD. • Markets are responding to news that China is likely to suspend its 125% tariff on some US imports. Any confirmation or denial by the authorities could change global risk sentiment and favor the Dollar. • Although there was a marginal increase in US Initial Jobless Claims, the fall in Continuing Claims indicates mixed labor conditions, which can influence investor expectations regarding economic strength and Fed rate moves. Investors are looking to some major developments which may have a bearing on the GBP/USD direction in the short term. The next UK Retail Sales data will be key in determining the resilience of local consumption with decreasing consumer confidence. In the United States, the final result for the Michigan Consumer Sentiment Index will reveal more about household perceptions, potentially altering Federal Reserve assumptions. While all of this is going on, news that China can suspend its 125% tariff on some US imports has given hope to global trade, supporting the US Dollar. Plus, confusing news from US labor data—increasing Initial Jobless Claims offset by decreasing Continuing Claims—are keeping traders on their toes as they wait for additional economic reports. Traders are targeting UK Retail Sales and US Michigan Consumer Sentiment data for new market guidance. In the background, news that China may ease tariffs on imports from the US is helping support the Dollar. Uncertainty-creating mixed US labor data still hangs over the outlook. • A key consumer spending gauge capable of influencing the strength or weakness of GBP. • The last decline to -23 indicates weakened UK sentiment dampening the Pound. • A measure of US consumer sentiment that can influence USD and Fed rate expectations. • News of China relaxing its 125% tariff on some US imports can be supportive of risk appetite and lift the Dollar. • Conflicting labor data creates uncertainty in the path of the USD, driving short-term volatility. • Recovering currently around 99.80, DXY performance is indicative of overall USD strength versus major currencies. • Continuous US negotiations with significant Asian allies such as Japan and South Korea are likely to have an effect on the risk tone and market sentiment. GBP/USD pair is presently affected by a combination of economic and geopolitical influences forming the overall market sentiment. In the UK, confidence among consumers has suffered, with April’s GfK Consumer Confidence index plummeting to -23—its lowest since November 2023. The decline reflects increasing unease among households regarding increasing living expenses and overall economic uncertainty. Consequently, investors are keenly watching for upcoming UK Retail Sales data, which will give a better indication of the strength of domestic consumption and the state of the economy. GBP/USD DAILY CHART PRICE CHART SOURCE: TradingView Internationally, news is that China can temporarily suspend the 125% tariff on specific US imports such as medical devices and aircraft leasing. This piece of news has created a glimmer of hope regarding global trade relations and has the potential to have wider repercussions for market mood. Furthermore, developments in US trade talks with Asian allies like South Korea and Japan are of keen interest among market participants. In the US, mixed labour market indicators—such as higher jobless claims while continuing claims are declining—continue to guide expectations on economic strength and near-term policy interventions. TECHNICAL ANALYSIS GBP/USD broke below the major psychological support line of 1.3300, indicating the possibility of changing short-term market sentiment. The pair is now trading around 1.3290, showing stronger bear pressure. If the selling momentum remains intact, the next support region would be witnessed around 1.3250. On the positive side, any bounce can be expected to encounter resistance around 1.3350, where recent consolidation has taken place. Traders will be looking for confirmation signs in the form of candle patterns or volume changes to gauge the power of this breakout and determine the probability of a sustained trend reversal or a short-term pullback. FORECAST If stronger-than-anticipated consumer demand in the latest UK Retail Sales figures is reflected, this may reclaim some of the confidence in the Pound, leaving some space for a short-term rebound in GBP/USD. Furthermore, if US economic signals like the Michigan Consumer Sentiment Index are lower than anticipated, this may weaken the Dollar and favor a recovery in the pair. Here, GBP/USD may test the resistance levels near 1.3350 and may reach as high as 1.3400, if risk sentiment on the back of easing global trade tensions. Conversely, sustained UK weakness, especially if Retail Sales fall or consumer sentiment continues to be weak, may intensify pressure on the Pound. If the US Dollar continues to hold firm—driven by hopes over trade negotiations or steady labor market data—the pair can continue its fall. A break below 1.3290 may open the gates towards the next support at 1.3250, and if bearish pressure continues, further losses towards 1.3200 cannot be excluded.

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