GBP/USD rose around 1% on Monday, driven by the weakening of the US Dollar (USD). The currency pair trades above 1.2700, marking its highest point since mid-December.
Disappointing macroeconomic data and news of tariffs from US President Donald Trump dampened market sentiment towards the USD. The pair previously experienced daily losses at the end of last week, closing around 1.2600.
Usd Weakness Supports Sterling
The USD displayed strength during the latter half of last week, impacting GBP/USD negatively. Tariff confirmations and political tensions contributed to a cautious approach among market participants before the weekend.
Sterling began the week strongly, benefitting from a weaker greenback after data releases from the United States failed to meet expectations. As a result, GBP/USD climbed past 1.2700 for the first time in months, setting the stage for traders to assess whether this momentum has further to run.
Market sentiment shifted as concerns grew over economic conditions in the US. Fresh tariff announcements from the White House unsettled investors, adding to the pressure on the dollar. At the end of the previous week, traders had been more inclined towards the US currency, with GBP/USD slipping to around 1.2600. However, with weaker economic figures emerging, that pattern reversed at the start of the new trading week.
The latter half of last week had been marked by a more defensive approach among traders, as political developments and fresh trade policies encouraged a move towards stability. This generally favoured the dollar, but those gains proved short-lived once investors reassessed the broader economic picture.
Outlook For Gbp Usd
With GBP/USD now at levels not seen since December, the focus shifts to whether the British currency can sustain its recent advance or if the dollar might regain traction. Economic data releases will continue to shape expectations, especially as traders determine whether policy responses from central banks could alter momentum in the short term.
