Pound Rallies Sharply Weak Dollar Boosts GBP, but BoE Rate Outlook May Complicate Future Gains

GBP/USD has risen for the third consecutive session, reaching 1.2857, primarily driven by a weaker US Dollar amid escalating US-China trade tensions.

Key factors influencing GBP/USD movements

China has raised tariffs on US goods to 84%, effective 10 April, in retaliation for the US increasing duties on Chinese imports to 104%.

Bank of England Deputy Governor Clare Lombardelli warned that these tariffs could dampen UK economic growth, though their impact on inflation remains uncertain.

Markets are now pricing in a high probability of a 50-basis-point rate cut in May, with expectations shifting to four cuts by the end of 2025 – up from three previously forecast. Investors are nearly 100% confident in a second cut in June, while a third reduction in September is already fully priced in.

Technical Outlook: GBP/USD

H4 Chart Analysis

·         GBP/USD is consolidating around 1.2825, with the potential for an upward extension to 1.2875

·         A downward wave towards 1.2660 remains plausible, with further downside risk to 1.2450

·         The MACD indicator supports this outlook, with its signal line below zero and pointing sharply downward

H1 Chart Analysis

·         The pair has formed a tight consolidation range near 1.2794, with scope for a rise to 1.2880 to complete the current growth wave

·         A subsequent decline back to 1.2794 is likely, potentially forming a new consolidation range

·         A breakout upwards could see a correction towards 1.2934, while a downward exit may extend the downtrend to 1.2450

·         The Stochastic oscillator aligns with this view, as its signal line sits above 80 but is trending downward towards 20

Conclusion

While the Pound benefits from Dollar weakness, the BoE’s evolving rate-cut trajectory and external trade risks could challenge further gains. Traders should monitor technical levels and central bank signals closely.

Disclaimer

Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

read more
Continued Trade Tensions Steer Markets: April 15, 2025

Continued Trade Tensions Steer Markets: April 15, 2025

Global financial markets are navigating a complex landscape on April 15, 2025, as US President Donald Trump’s tariff exemptions on tech and auto sectors spark a cautious risk-on sentiment, while escalating US-China trade tensions—marked by China’s 125% retaliatory tariffs against the US’s 145% duties—fuel recession fears.
Moneta Markets | 3小時10分鐘前
ATFX Market Outlook 15th April 2025

ATFX Market Outlook 15th April 2025

The New York Fed's March survey indicated rising short-term inflation expectations and low consumer confidence. Federal Reserve Governor Waller mentioned that Trump's tariff policies could force rate cuts to prevent a recession despite high inflation.
ATFX | 8小時23分鐘前
Weekly Technical Outlook – EUR/USD, GBP/USD, USD/CAD

Weekly Technical Outlook – EUR/USD, GBP/USD, USD/CAD

EUR/USD fights for new higher highs ahead of ECB rate decision. USD/CAD looks fragile as the BoC could face tough debate over rate cuts. GBP/USD extends swift rally, eyes April’s peak as the focus turns to jobs and CPI numbers.
XM Group | 20小時47分鐘前
ATFX Market Outlook 14th April 2025

ATFX Market Outlook 14th April 2025

U.S. stocks surged on Friday as major banks began reporting Q1 earnings, concluding a volatile week marked by trade tensions. All three major indices recorded substantial weekly gains, with the S&P 500 and Dow experiencing their largest rebound since November 2023. However, consumer confidence declined in April to its lowest level in nearly three years, while inflation expectations surged.
ATFX | 1天前
ATFX Market Outlook 11th April 2025

ATFX Market Outlook 11th April 2025

U.S. consumer inflation unexpectedly cooled in March, with the core CPI rising 2.8% year-over-year, marking the smallest increase since March 2021. However, new tariffs may hinder further improvement in inflation. U.S. stocks plunged on Thursday amid growing concerns over President Trump's tariff policies. The Dow fell by 2.5%, the S&P 500 dropped by 3.46%, and the Nasdaq slid by 4.31%.
ATFX | 4天前
ATFX Market Outlook 10th April 2025

ATFX Market Outlook 10th April 2025

Thirteen hours after implementation, Trump announced a 90-day tariff pause for several countries, raising tariffs on Chinese imports to 125%. Financial markets surged, with the S&P 500 closing 9.5% and the Nasdaq up 12.2%, marking the most significant single-day gain since January 3, 2001, and the second largest on record.
ATFX | 5天前