- GBP/USD could see further valuation as the US dollar weakens due to improved market sentiment.
- The European Union and the US are nearing an agreement to impose 15% tariffs on EU goods.
- Traders are anticipating index data from the S&P Purchase Managers in the UK on Thursday.
GBP/USD has been holding steady after four days of gains, trading around 1.3580 during Asian hours on Thursday. It remains near a two-week high as the US dollar continues to decline, driven by optimism regarding potential trade agreements between the US and its important partners.
The Financial Times mentioned that the EU and the US are engaged in discussions to introduce a 15% tariff on EU goods entering the US. Furthermore, US President Donald Trump announced a significant tariff arrangement with Japan on Tuesday, which also includes a 15% tariff on exports from Japan.
Nonetheless, any shortcomings of the US dollar could be moderated by easing worries about the Federal Reserve’s independence. US Treasury Secretary Scott Bescent stated late Thursday that the announcement of the next candidate for the Federal Reserve Chair is expected in December or January. Bessent noted that there’s “no rush” in selecting a successor to the current Chair, Jerome Powell.
In the UK, traders are looking out for the S&P Purchase Manager Index (PMI) data set to be released on Thursday. The report is anticipated to show minor improvements in both production and the services sector for July. Additionally, retail sales are predicted to bounce back in June, likely influenced by the warm weather.
The Bank of England (BOE) is expected to temporarily halt long-term gold leaf sales due to diminished demand from traditional buyers, such as pension funds. Still, traders are predicting two rate cuts by 2025, although they’ve slightly lowered their expectations regarding the easing of BOE policies.
