The British Pound (GBP) regained momentum against the US Dollar (USD) during Thursday’s Asian session, recovering earlier losses and marking its third consecutive day of gains. The GBP/USD pair was last seen hovering near the 1.2850 level, supported by broader market dynamics despite domestic economic headwinds.
The Pound initially came under pressure after the release of underwhelming data from the Royal Institution of Chartered Surveyors (RICS), which showed UK housing price growth stalling in March. The RICS Housing Price Balance rose by just 2%, a sharp deceleration from January’s 20% and February’s 11% increases, and significantly below the expected 8% rise. The data points to a notable cooling in the UK housing market, signaling possible strain on consumer confidence.
Additional pressure on the Pound came from renewed trade tensions between the United States and China. US President Donald Trump reignited the trade conflict by raising tariffs on Chinese imports to 125%, prompting an immediate retaliatory move by China, which increased tariffs on US goods to 84%. This escalating tit-for-tat exchange casts a shadow over the global trade environment and raises concerns for the UK, whose post-Brexit trade position remains vulnerable amid rising global protectionism.
Despite these concerns, the GBP/USD pair managed to stay resilient. Market participants are turning their focus to a scheduled speech by Bank of England (BoE) Deputy Governor for Financial Stability, Sarah Breeden, who will address the UK’s economic and financial stability outlook at the Market News International Connect event. Her remarks could offer insights into the central bank’s policy stance amid growing expectations for rate cuts.
Investor sentiment has grown increasingly dovish toward the BoE, with market forecasts now factoring in potential rate cuts in the near term. Analysts at Deutsche Bank project that the central bank may opt for a significant 50 basis point cut as early as May, citing rising global risks and softening domestic indicators.
Across the Atlantic, the Federal Reserve also faces mounting challenges. Minutes from the latest Federal Open Market Committee (FOMC) meeting revealed near-unanimous concern among US policymakers over the competing threats of stubborn inflation and weakening economic growth. The Fed warned of “difficult tradeoffs” ahead, reinforcing a cautious, data-dependent approach to future interest rate decisions.
As global uncertainty persists, the Pound continues to benefit from broader USD weakness and risk-on sentiment, but fragile domestic fundamentals and geopolitical risks may limit further upside in the short term. Traders will remain alert to upcoming central bank commentary and economic data releases that could shift policy expectations and market direction.
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