Pound Sterling rises against a weakened US Dollar, UK data eyed

Aprender / Perspectiva del mercado / Pound Sterling rises against a weakened US Dollar, UK data eyed

Pound Sterling rises against a weakened US Dollar, UK data eyed

The Pound Sterling gains against the US Dollar as US-EU disputes weaken the Greenback.
US President Trump threatens 10% additional tariffs on several EU members, including the UK.
Investors await key UK data, notably employment and inflation figures.

The Pound Sterling (GBP) trades 0.15% higher to near 1.3400 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair rises as the US Dollar (USD) underperforms across the board amid disputes between the United States (US) and the European Union (EU) over Washington’s desire to purchase Greenland.

During the press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.2% lower to near 99.15.

Over the weekend, US President Donald Trump announced 10% tariffs on several EU members through a post on Truth. Social, adding that "the National Security of the US, and the world at large, is at stake". Trump stated that additional tariffs will come into effect from February 1 and will remain until Washington makes a “complete and total purchase” of Greenland.

In response, EU members have criticized new tariff threats from Washington, calling them “undesirable”, and have vowed equal countermeasures. France's President Emmanuel Macron said, "Tariff threats are unacceptable in this context, and we will not be swayed by any intimidation," BBC reported.

Analysts at ANZ have stated that the US Dollar is bearing the brunt of US-EU disputes as markets are pricing in “increased political risk premia” on the Greenback.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Swiss Franc.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.24%	-0.22%	-0.11%	-0.21%	-0.22%	-0.44%	-0.52%
EUR	0.24%		0.02%	0.15%	0.04%	0.03%	-0.19%	-0.27%
GBP	0.22%	-0.02%		0.15%	0.02%	0.00%	-0.21%	-0.31%
JPY	0.11%	-0.15%	-0.15%		-0.12%	-0.12%	-0.34%	-0.44%
CAD	0.21%	-0.04%	-0.02%	0.12%		-0.01%	-0.22%	-0.32%
AUD	0.22%	-0.03%	-0.01%	0.12%	0.00%		-0.23%	-0.32%
NZD	0.44%	0.19%	0.21%	0.34%	0.22%	0.23%		-0.10%
CHF	0.52%	0.27%	0.31%	0.44%	0.32%	0.32%	0.10%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Daily Digest Market Movers: Fed's Bowman supports more interest rate cuts

The Pound Sterling trades higher against the US Dollar, but lower against its major currency peers, as US President Trump has also threatened 10% tariffs on the United Kingdom (UK) amid US-EU disputes over Greenland.
In response, UK Prime Minister Keir Starmer stated that "tariffs are not the right way ahead and should not be used against allies". Starmer added, "We believe in partnership and will keep dialogue open."
Going forward, the Pound Sterling is expected to continue to remain volatile amid a UK data-packed week, starting with the employment figures for the three months ending in November due on Tuesday.
Investors will pay close attention to the UK labor market data to get fresh cues on the Bank of England’s (BoE) monetary policy outlook. The ILO Unemployment Rate is expected to show a drop to 5% from 5.1% in three months ending November, the highest level seen since early 2021. Average Earnings Including Bonuses is seen lower at 4.6% from the prior reading of 4.7%.
This week, other major releases are the UK Consumer Price Index (CPI) and Retail Sales figures for December, and the preliminary S&P Global Purchasing Managers’ Index (PMI) data for January.
In the US, traders remain confident that the Federal Reserve (Fed) will hold interest rates steady at the upcoming January monetary policy meeting, according to the CME FedWatch tool. However, Fed Vice Chair for Supervision Michelle Bowman said on Friday that the Fed should be prepared to cut rates further amid fragile labor market conditions.

Technical Analysis: GBP/USD struggles around 50-day EMA

GBP/USD trades slightly higher at 1.3397 as of writing. Price holds just above the rising 50-Exponential Moving Average (EMA) at 1.3386, keeping the short-term tone supported.

The 14-day Relative Strength Index (RSI) at 48 (neutral) reflects tempered momentum after the recent pullback.

Measured from the 1.3793 high to the 1.3009 low, the 50% Fibonacci retracement at 1.3401 caps immediate upside. A decisive recovery move above the same could push the price towards the 61.8% Fibonacci retracement at 1.3494. On the contrary, a close below 38.2% Fibo retracement at 1.3309 would extend the decline toward the December low at 1.3180.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

Average Earnings Including Bonus (3Mo/Yr)

The Average Earnings Including Bonus, released by the UK Office of National Statistics, is a key short-term indicator of how levels of pay are changing within the UK economy. Generally, an increase in earnings is seen as bullish for the Pound Sterling (GBP), whereas a low reading is seen as bearish.