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GBP/USD Rebounds from Monthly Low on Trade War Fears


Last week’s high: $1.4060

Last week’s low: $1.3715

Concerns about US Trade Tariffs Help Pound to US Dollar Recover

Despite broad concerns about the possibility of a ‘hard Brexit’ and uncertainty about upcoming UK-EU negotiations over the past week, the Pound to US Dollar exchange rate edged away from its worst levels before the weekend.

Thursday night saw the US Presidential administration surprise markets by announcing strict trade tariffs on US imports of steel and aluminium. As the US President followed up on trade war concerns by indicating that the US could easily win a potential trade war, markets entered panic mode.

Amid concerns about how the tariffs could influence the US economic outlook and fears that more protectionist policies could be on the way, US Dollar trade weakened towards the end of the week.

USD Outlook: US Trade News and Job Market Results to Inspire GBP/USD

Political news is likely to remain in focus for Pound to US Dollar exchange rate traders for most of next week, particularly in relation to Brexit and the US Presidential administration’s plans for US trade.

Any further signs of US protectionism being ramped up could further dent US Dollar demand, and this could help GBP/USD recover further.

Sterling may also advance if UK and EU officials begin to show more signs of cooperating and reaching agreements over major Brexit issues like the Irish border and the transition period.

Some notable UK and US ecostats will be published throughout next week too, which could influence GBP/USD. UK services data will be released on Monday, but the US Non-Farm Payroll results due at the end of the week are more likely to be influential.

Key Events

5th March

09:30 UK Services and Composite PMI

14:45 US Markit Services and Composite PMI

15:00 US ISM Non-Manufacturing PMI

7th March

13:15 US ADP Employment Change

13:30 US Trade Balance

9th March

09:30 UK Trade Balance

09:30 UK Industrial and Manufacturing Production

09:30 UK Consumer Inflation Expectations

13:30 US Non-Farm Payroll Report

15:00 US Wholesale Inventories

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To keep up to date with the US Dollar, visit the USD blog in our Currency News section.

Arron Morris
Senior Currency Broker
T: 01442 892 065

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