The GBP/USD currency pair has surged above the 1.2500 mark during the European session on Thursday, buoyed by an improving risk mood and favorable economic data from the United Kingdom. The market's attention is focused on European policymakers' responses and the impact of EU and US economic data. Meanwhile, escalating trade tensions, fueled by former President Donald Trump's 25% import tax on steel and aluminum entering the US, are casting shadows over Europe.
Amidst these developments, the EUR/USD is continuing its upward momentum for the third consecutive session, with the pair aiming for 1.0450 during the European session on Thursday. This rally is partially driven by the widespread selling of the US Dollar in anticipation of a potential resolution to the Russia-Ukraine conflict. The Pound Sterling, in particular, is gaining strength due to the positive risk sentiment.
The United Kingdom's economy has shown resilience, expanding at an annual rate of 1.4% in the fourth quarter, exceeding market expectations of 1.1%. This better-than-expected growth has provided further support to the Pound Sterling, as investors remain optimistic about the UK's economic outlook.
Market participants are closely watching how European policymakers will react to the increasing trade tensions and what effects these will have on transatlantic relations. The EU and US economic data are also under scrutiny as they could provide further clues about future market directions.
It is important to note that neither FXStreet nor this article's author are registered investment advisors. This article is not intended to provide investment advice but rather to report on current market developments.