- GBP/USD hits a fresh high as hints of targeted tariffs from Trump advisors weigh on the US Dollar despite strong US data.
- US Services PMI and JOLTS job openings exceed forecasts, highlighting a resilient US economy.
- UK retail sales reach their highest level since March 2024, boosting the Pound in a quiet UK economic calendar week.
The Pound Sterling climbed to a four-day peak of 1.2575 on Tuesday, posting its largest gain in three days, before retreating to 1.2495, down 0.12%. The Washington Post reported that advisers to US President-elect Donald Trump are considering targeted tariffs on specific imports, weakening the US Dollar despite recent strong economic data.
US Data Strengthens Dollar Amid Mixed Market Sentiment
The ISM Services PMI rose to 54.1 in December, beating forecasts of 53.3 and up from 52.1. Simultaneously, the US Department of Labor reported JOLTS job openings surged to 8.098 million, surpassing the 7.70 million estimate. These data points highlight the robustness of the US economy, although they overshadowed the trade deficit report.
The US trade deficit widened to $-78.2 billion in November, above October’s $-73.6 billion. Imports climbed 3.4% to $351.6 billion, while exports rose 2.7% to $273.4 billion, according to the Bureau of Economic Analysis.
UK Retail Sales Hit Highest Level Since March 2024
The British Retail Consortium reported UK retail sales increased by 3.2% year-over-year in December, the strongest performance since March 2024. However, the UK economic calendar remains light this week, leaving the Pound influenced by broader market trends and US data.
GBP/USD Technical Outlook
The GBP/USD daily chart indicates the pair is retracing some weekly gains. A drop below 1.2450 could trigger a retest of 1.2400, with further downside targeting the January 2 low of 1.2351. Conversely, a rebound could see the pair retest 1.2500, the daily high of 1.2575, and potentially 1.2600.
