The Pound Sterling is appreciating on Tuesday, despite the Bank of England Governor indicating the possibility of additional easing, in the context of ongoing uncertainty regarding US trade policies. Currently, GBP/USD is trading around the 1.3530 mark, reflecting an increase of 0.30%. Sterling resumes its upward trajectory despite the Bank of England indicating possible interest rate reductions. The market sentiment has shown signs of improvement; however, concerns regarding AI disruption continue to weigh on software stocks, particularly as the Anthropic AI model has the potential to modernise the software operating in the majority of ATMs globally, with IBM as the driving force behind it. In the foreign exchange market, the US Dollar experienced a rebound from weekly lows, resulting in a positive shift as indicated by the US Dollar Index.
The DXY, which assesses the performance of six currencies against the American Dollar, has increased by 0.16% to reach 97.85. Data in the US indicated that American households are increasingly optimistic regarding the labour market, which appears to be stabilising, while inflation has moderated to some extent, as reported by the Conference Board. The CB Consumer Confidence increased from a previously adjusted 89 figure last month to 91.2 in February. Chicago Fed President Austan Goolsbee expressed a hawkish stance, advocating for the maintenance of steady rates while emphasising that a 3% inflation rate “is not good enough — and it’s not what we promised when the Federal Reserve committed to the 2% target.” In the UK, Bank of England Governor Andrew Bailey remarked that during the March meeting, the critical issue at hand is whether a reduction is warranted. He indicated that there are signs of weakness in the labour market and disclosed in the annual report that “with inflation returning to target, there should be scope for some further easing in monetary policy.”
On Tuesday, the United States implemented 10% global tariffs pursuant to Section 122, as disclosed in the notice from US Customs. Nevertheless, the Trump administration said that duties will be set at 15% for 150 days. In the United Kingdom, Prime Minister Keir Starmer is under significant pressure as his Labour Party prepares for elections in the Gorton and Denton constituency of Manchester on Thursday. A negative result may amplify the demands from factions within Starmer’s party aimed at removing him from the position of Prime Minister. In that scenario, GBP/USD may experience additional declines attributable to short-term political instability. On the daily chart, GBP/USD is positioned at 1.3521. The near-term bias remains neutral, exhibiting a slight bullish inclination as the price sustains its position above the ascending support trend line that emerged around 1.3035, consistently drawing in buyers during minor pullbacks. Spot also trades above the clustered simple moving averages around 1.3500, which now track below the price and reinforce the notion of an underlying uptrend despite the recent consolidation under the descending resistance line from 1.3869.
The persistent inability to push losses beneath the mid-1.3400 threshold maintains a constrained downside momentum, whereas the sequence of higher supported closes along the upward trajectory indicates that dip demand continues to be robust. The initial resistance is represented by the descending trend-line barrier currently intersecting just above 1.3500. A sustained break above this level would pave the way toward the recent swing area around 1.3700, followed by the 1.3800 zone. On the downside, immediate support is observed near 1.3450, consistent with recent reaction lows, succeeded by the ascending trend-line support and the cluster of the 100–200-day moving averages around 1.3400. A daily close beneath the 1.3400 threshold would diminish the bullish outlook and reveal potential for deeper pullbacks toward 1.3300. Conversely, maintaining a position above this level sustains attention on a possible breakout above the downtrend resistance.