The Pound Sterling extended its gains versus the US Dollar on Tuesday, as the proposed ceasefire between Israel and Iran was violated by both parties, despite US President Donald Trump’s warning. Nevertheless, the risk appetite remains strong, despite the ongoing developments in the Middle East. The GBP/USD trades above 1.3600, gaining over 0.65%, after printing a weekly high of 1.3626.
Aside from geopolitical risks, the Fed Chair Jerome Powell said in prepared remarks for his testimony at the US Congress, that rate cuts can wait, as the central bank studies the impact of tariffs on the economy. He stated that “tariffs this year are likely to push up prices and weigh on economic activity,” adding that the impact could be short-lived or persistent.
He pushed back against a previously dovish posture by Fed Governors Christopher Waller and Michelle Bowman. Last year, they were two of the most hawkish members, who, so far, had backed a rate cut in the July meeting.
Recently, Cleveland Fed Beth Hammack, a hawk, revealed that rate cuts could be “on hold for quite some time.” She echoed previous words of Atlanta Fed President Raphael Bostic, who said that there’s no need to cut rates now and acknowledged that he sees just a 25 basis points (bps) of easing this year.
US housing data showed that home prices rose 2.7% from the previous year in April. Across the pond, the UK economic docket was light, with the release of the CBI Industrial Trends Survey revealing that manufacturing output volumes fell in the quarter to June, from -25 to -23. The poll showed “Manufacturers expect output volumes to decline at a slower pace in the three months to June.”
Bank of England Governor Dave Ramsden said that “cumulative evidence of material loosening in the labour market” influenced his decision at the latest BoE meeting. He said that the weakness in the labor market is getting his attention.
Ahead, traders will eye Fed Chair Jerome Powell’s testimony at the US House of Representatives.
On Wednesday, the UK docket will feature speeches by members of the Bank of England’s Monetary Policy Committee (MPC). In the US, Fed Chair Powell will appear at the US Senate.
The GBP/USD remains upwardly biased, after briefly diving towards the 50-day SMA at 1.3407. Since then, the pair has climbed and appears poised to break decisively above the 1.3600 figure.
Momentum remains bullish as depicted by the Relative Strength Index (RSI). However, traders should be aware that geopolitical risks loom. Hence, an escalation of the Middle East conflict could pave the way for a pullback.
If GBP/USD weakens, the first support is seen at 1.3550, followed
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 | -1.22% | -1.53% | -1.32% | -0.36% | -1.09% | -1.24% | -1.31% | |
| EUR | 1.22% | -0.33% | -0.07% | 0.88% | 0.10% | 0.00% | -0.13% | |
| GBP | 1.53% | 0.33% | 0.32% | 1.21% | 0.44% | 0.32% | 0.20% | |
| JPY | 1.32% | 0.07% | -0.32% | 0.95% | 0.20% | 0.13% | -0.08% | |
| CAD | 0.36% | -0.88% | -1.21% | -0.95% | -0.69% | -0.89% | -1.00% | |
| AUD | 1.09% | -0.10% | -0.44% | -0.20% | 0.69% | -0.13% | -0.24% | |
| NZD | 1.24% | -0.00% | -0.32% | -0.13% | 0.89% | 0.13% | -0.11% | |
| CHF | 1.31% | 0.13% | -0.20% | 0.08% | 1.00% | 0.24% | 0.11% |
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).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
