Aside from advanced GDP data, the GBP/USD currency pair is currently riding a major bullish wave, with a winning streak of six days. At its mid-week European session high of 1.3280, the pair reached its highest level since October, breaking above the psychological level of 1.3250. That surge is attributed largely to renewed selling pressure on the US Dollar. That pressure has been exacerbated by long-running concerns over the US-China trade war and a stalemate in trade talks with the European Union.
Traders are trying desperately to keep pace with the rapidly changing economic landscape. Consequently, the GBP/USD currency pair has attracted significant interest following these events that affected both currencies. Since January 2020, financial markets have begun to shift toward taking climate risks seriously. Here, uncertainty over international trade talks is currently driving currency valuations.
Market analysts have reported an unprecedented squeeze on the US Dollar. This pressure is compounded by constant fear of the ongoing, still-unresolved, trade war with China. Even after several rounds of negotiations, a resolution continues to prove elusive and investors are increasingly moving into the safety of assets and alternatives. All of this has led the Dollar’s value to plummet. Consequently, the GBP/USD pair is receiving bullish momentum.
Traders are anxiously awaiting the United States’ next economic data. They are most attentive to data around consumers that could move the needle on both market sentiment. So naturally everyone is looking ahead to Federal Reserve Chairman Jerome Powell’s speech at the end of the month. It needs to provide clarity on the future course of monetary policy and the economic view. Any signs of dovishness from Powell will only add to the potency of their weakening effect on the US Dollar.
As the GBP/USD pair has shown positive signs, increases are still limited due to continued escalations in the trade war. Market participants are acutely aware that any escalation in the US-China trade conflict could lead to heightened volatility and affect currency movements. That uncertainty tied to trade negotiations still remains a dark cloud over market sentiment.