- The US dollar's decline during last week's trading allowed bulls to quickly push the GBP/USD currency pair towards the resistance level of 1.2715, the pair's highest in 2025.
- This was before experiencing profit-taking sell-offs at the end of the week, which moved it towards the support level of 1.2559 and stabilized around 1.2580 at the start of this important week.
- This includes the announcement of key US job numbers.
Will Britain Be Affected by US Trade Wars?
For Britain, “tariffs will not be necessary”; for everyone else, they will be necessary. This is the scene after British Prime Minister Keir Starmer’s visit to President Donald Trump in Washington. Trump said that Britain and the United States of America will work towards a “new economic deal” that could happen “very quickly.” “I think we have a good chance of making a deal that could be great, really great for both countries,” Trump added, “We could end up with a real trade deal where tariffs won’t be necessary.”
Trump made his comments hours after the president said the US would soon move forward with 25% tariffs on Canada and Mexico and would add an additional 10% on Chinese imports. Also, he confirmed that another round of tariffs was due in April.
Meanwhile, the developments underscored market suspicions that Britain is relatively insulated from Trump’s new world of tariffs.
According to forex trading, the pound outperformed all of its G10 peers on the day – except the US dollar – confirming that the pound is increasingly seen as a relative safe haven in the tariff trade. “The special relationship has helped sterling limit losses within the G10,” commented experts at Societe Generale.
According to licensed trading companies' platforms, the GBP/EUR exchange rate rose to its highest level since December 19 at 1.2131. The GBP/USD exchange rate fell to 1.2585 amid a broad-based US dollar recovery related to Trump's confirmation of broader tariffs. Generally, analysts see the Pound as a safe haven for tariffs, believing that Britain is less vulnerable to tariffs than major exporters like the EU. This supports the recent rise in the Pound against all its G10 currency peers.
Top Forex Brokers
Trading Tips:
Britain's avoidance of US tariffs means that the pound will be more resilient to the gains of the US dollar against other currencies, as it is sought as a safe haven from the consequences of Trump's policies.
The Future of US-UK Trade
In this regard, according to the Times, the US President offered Sir Keir Starmer a trade deal that could exempt Britain from being subject to US tariffs, as he praised the "wonderful" relationship between the two countries. Trump said that Starmer was "working hard" to convince him to exempt Britain from the 25 percent tariffs that he imposes on other countries, adding that he earned "whatever they pay him there."
For his part, British Prime Minister Starmer said that the deal will focus on artificial intelligence and other advanced technologies, placing Britain on the side of the US against what he criticized as an overly cautious approach in the EU. Starmer added, "We are taking a similar approach to this issue – instead of over-regulating these new technologies, we are seizing the opportunities they provide." "We have decided today to move forward to start working on a new economic deal based on advanced technology." Starmer echoed Trump's optimistic tone, saying, "AI could cure more. This could be a great achievement of our time."
Technical Analysis for the GBP/USD pair today:
According to recent trading on the daily chart and despite the recent selling, the GBP/USD pair is holding on to the recent bullish momentum as long as it is stable around and above the 1.2600 resistance. Furthermore, the bulls’ success in moving towards the 1.2685 and 1.2760 resistance levels will enhance the move towards the psychological resistance of 1.3000 respectively, which confirms the strength of the upward shift, while at the same time the technical indicators may move towards strong overbought levels. On the other hand, and for the same time frame, the support at 1.2420 will remain important for bears to be able to move again. Finally, we expect movements in narrow ranges until the reaction to the announcement of the US jobs numbers.
Ready to trade the GBP/USD Forex analysis? Check out the best forex trading company in UK worth using.