GBP/USD consolidates above mid-1.2900s; remains close to multi-month peak set on Thursday

FXStreet
Updated
Mitrade
coverImg
Source: DepositPhotos

GBP/USD struggles to gain any meaningful traction on Friday amid mixed fundamental cues.


A modest USD uptick caps the upside, though the divergent Fed-BoE outlook lends support.


Spot prices, meanwhile, remain on track to register modest gains for the third straight week. 


The GBP/USD pair lacks any firm intraday direction on Friday and oscillates in a narrow trading band, around the 1.2960 area during the Asian session. Spot prices, however, remain close to the highest since early November – levels beyond the 1.3000 psychological mark touched on Thursday – and remain at the mercy of the US Dollar (USD) price dynamics. 


The Federal Reserve (Fed) maintained its forecast for two 25 basis points rate cuts in 2025 at the end of March policy meeting on Wednesday and gave a bump higher to its inflation projection. Adding to this, the uncertainty surrounding US President Donald Trump's trade tariffs and escalating geopolitical tensions underpin the safe-haven Greenback and turns out to be a key factor acting as a headwind for the GBP/USD pair. 


The USD Index (DXY), which tracks the Greenback against a basket of currencies, looks to build on a modest recovery from a multi-month low touched earlier this week, though any meaningful appreciation still seems elusive. Investors remain worried about a tariff-driven slowdown in the US economic activity, which, in turn, might force the Fed to resume its rate-cutting cycle sooner than expected. 


The markets now currently pricing in the possibility that the Fed would lower borrowing costs in June, July, and October. In contrast, the Bank of England (BoE) warns against assumptions for cuts and also increased its forecast for a peak in inflation this year. This suggests that the UK central bank will lower borrowing costs more slowly than other central banks, including the Fed, lending support to the GBP/USD pair. 


There isn't any relevant market-moving economic data due for release on Friday, either from the UK or the US. Moreover, the aforementioned fundamental backdrop suggests that the path of least resistance for spot prices is to the upside. Hence, any subsequent slide could be seen as a buying opportunity and is likely to remain limited. Nevertheless, spot prices remain on track to end in the green for the third straight week.

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
USD/CAD climbs to multi-week top, closer to mid-1.3900s amid sustained USD buyingThe USD/CAD pair is seen building on this week's recovery from the year-to-date low, around mid-1.3700s, and gaining positive traction for the third successive day on Friday.
Author  FXStreet
2 hours ago
The USD/CAD pair is seen building on this week's recovery from the year-to-date low, around mid-1.3700s, and gaining positive traction for the third successive day on Friday.
placeholder
EUR/USD fumbles again as trade deal hopes bolster Greenback bidsEUR/USD trimmed into the low end on Thursday, shedding a little over two-thirds of one percent from the day’s opening bids after US Dollar (USD) bids caught a broad-market boost following the tentative announcement of a pending trade deal between the United States (US) and the United Kingdom (UK).
Author  FXStreet
3 hours ago
EUR/USD trimmed into the low end on Thursday, shedding a little over two-thirds of one percent from the day’s opening bids after US Dollar (USD) bids caught a broad-market boost following the tentative announcement of a pending trade deal between the United States (US) and the United Kingdom (UK).
placeholder
AUD/USD moves below 0.6400 ahead of China’s trade balance dataThe AUD/USD pair continues its losing streak for the third consecutive session, trading near 0.6390 during Friday's Asian session. The Australian Dollar (AUD) remains under pressure due to stalled progress in US-China trade negotiations.
Author  FXStreet
3 hours ago
The AUD/USD pair continues its losing streak for the third consecutive session, trading near 0.6390 during Friday's Asian session. The Australian Dollar (AUD) remains under pressure due to stalled progress in US-China trade negotiations.
placeholder
EUR/USD faces pressure as US Dollar ticks higher, US-UK trade deal in focusEUR/USD ticks lower below 1.1300 during European trading hours on Thursday.
Author  FXStreet
18 hours ago
EUR/USD ticks lower below 1.1300 during European trading hours on Thursday.
placeholder
USD/CAD Price Forecast: Remains confined in a multi-week-old range; not out of the woods yetThe USD/CAD pair attracts buyers for the second successive day on Thursday and recovers further from the year-to-date (YTD) low, around the mid-1.3700s touched earlier this week.
Author  FXStreet
19 hours ago
The USD/CAD pair attracts buyers for the second successive day on Thursday and recovers further from the year-to-date (YTD) low, around the mid-1.3700s touched earlier this week.
Real-time Quote