The post GBP/USD trades with negative bias around 1.2460 amid modest USD bounce appeared on BitcoinEthereumNews.com.

GBP/USD edges lower on Monday amid the emergence of some US Dollar buying. Trump’s tariffs on Columbia revive trade war fears and boost the safe-haven USD. Fed rate cut bets, sliding US bond yields cap the buck and lend support to the pair. The GBP/USD pair kicks off the new week on a softer note and erodes a part of Friday’s strong gains to the 1.2500 psychological mark, or a near three-week peak. Spot prices currently trade around the 1.2460 region, down 0.20% for the day amid a modest US Dollar (USD) strength, though the downtick lacks any follow-through selling or bearish conviction.  The USD Index (DXY), which tracks the Greenback against a basket of currencies, rebounds from over a one-month low amid the flight to safety, triggered by US President Donald Trump’s decision to impose import duties on Colombia. Trump imposed a 25% tariff on all imports from Colombia after the latter refused to allow two US military planes carrying deported migrants to land in the country. Trump also warned that the tariffs will increase to 50% by next week on further noncompliance, fueling concerns about global trade wars and tempering investors’ appetite for riskier assets.  Any meaningful USD appreciation, however, seems elusive in the wake of rising bets that the Federal Reserve (Fed) will lower borrowing costs twice by the end of this year amid signs of abating inflationary pressures in the US. The expectations were further lifted by Trump’s comments last Thursday, saying that he will demand that interest rates drop immediately. This leads to a fresh leg down in the US Treasury bond yields, which should keep a lid on further USD gains. Moreover, the uncertainty over the prospects for a Bank of England (BoE) rate cut in February helps limit losses for the GBP/USD pair. …

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Filed under: News - @ January 27, 2025 1:25 am