- GBP/USD Rebound: The Pound strengthens after dipping near 1.2500, recovering in the London session.
- US Dollar Weakness: The USD initially surged but reversed its gains following tariff announcements by Trump.
- Sentiment Shift: Positive sentiment from Trump's Treasury Secretary pick shifted to caution after new tariff plans.
Pound Sterling (GBP) recovers from intraday losses and strengthens against the US Dollar (USD) during Tuesday's London session after dipping near the key support level of 1.2500 earlier in Asian trading. The GBP/USD pair rebounds as the US Dollar reverses its intraday gains following a strong start.
The US Dollar Index (DXY), which tracks the Greenback against six major currencies, initially surged after President-elect Donald Trump warned of 25% import tariffs on goods from Canada and Mexico, with an additional 10% tariff on Chinese imports due to concerns over illicit drug trade through Mexico.
GBP/USD Forecast: Pound Sterling stabilizes between key technical levels
After briefly surging above 1.2600 on Monday, GBP/USD reversed course and closed lower. The pair dipped to the 1.2500 region during Asian trading but managed to recover to around 1.2550 by the European morning session.
The US Dollar faced significant selling pressure at the start of the week, which helped GBP/USD gain bullish momentum. Markets were buoyed by the news of Donald Trump appointing fund manager Scott Bessent as US Treasury Secretary, alleviating concerns about unorthodox fiscal policies. However, sentiment turned cautious later in the day after Trump announced plans to impose a 25% tax on imports from Canada and Mexico, along with a 10% tariff on Chinese goods.
