The British Pound (GBP) continues its upward momentum against the US Dollar (USD), with GBP/USD trading around 1.3580 during Thursday’s Asian session. The pair remains close to its two-week highs, supported by improved market sentiment and broad US Dollar weakness.
Investor optimism has been lifted by reports that the United States and European Union are nearing a new trade agreement, which includes a proposed 15% tariff on EU imports. Additionally, US President Donald Trump recently announced a separate 15% tariff deal with Japan, fueling hopes for further trade progress and boosting risk-sensitive currencies like the Pound.
However, the downside in the US Dollar remains somewhat limited as concerns over the Federal Reserve’s independence ease. Treasury Secretary Scott Bessent noted that a nomination for the next Fed Chair is expected by December or January, indicating stability in Fed leadership for now.
In the UK, attention turns to key economic data releases. The S&P Global Purchasing Managers Index (PMI) figures for July are due Thursday, with expectations pointing to a modest recovery in manufacturing and continued growth in the services sector. Additionally, Friday’s UK Retail Sales data could reflect a rebound in consumer activity, aided by favorable summer weather.
Meanwhile, the Bank of England is expected to temporarily halt long-term gilt sales due to declining demand from key investors, such as pension funds. Although traders have slightly dialed back their expectations for aggressive BoE rate cuts, markets still anticipate two rate reductions in 2025.
Key Levels to Watch:
- Resistance: 1.3600 psychological mark
- Support: 1.3520 and 1.3470
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