GBPUSD Climbs as U.S. Threatens UK, EU over Greenland
The British pound (GBPUSD) strengthened to around $1.342 on Tuesday, moving away from a four-week low as the US stepped up its attempt to secure Greenland for national security purposes.
The push up was helped by renewed pressure on the dollar index after President Donald Trump revived tariff threats linked to his push to assert control over Greenland.
U.S dollar declined against its trading pairs across the forex market amidst retaliation expectations against the renewed U.S. tariff threat against the UK and the European Union.
Trump warned that countries opposing his plans could face trade levies, including several European nations and the UK, prompting European leaders to signal possible retaliation.
In the UK, markets have slightly increased expectations for interest rate cuts, with investors now pricing around 44 bps of easing from the BoE by year-end, as tariff risks could slow growth.
Trump appears to be using the International Emergency Economic Powers Act to authorise the threat. Ironically, the Supreme Court could rule on the legality of its use later this week. The administration’s effort to secure Greenland also is spurring bipartisan opposition.
Attention now turns to a busy week of data, including wages, jobs, inflation, public finances and retail sales. Inflation is expected to tick higher temporarily but remain on a broader downward trend.
The IMF recently reinforced that view, projecting UK inflation to return to the 2% target by the end of the year as the labour market cools.
GBPUSD opened a few ticks above the pre-weekend low of $1.3365 and quickly dropped to nearly $1.3330 before steadying.
Sterling recovery and rose slightly through last Friday’s high of about $1.3415. A close above there and the 200-day moving average (~$1.3405) would appear constructive. Ethereum Drops By 3% in Fresh Crypto Selloffs
