- The GBP/USD pair is expected to rise to about 1.3195 during the early European session on Tuesday.
- The Bank of England’s method of evaluating progressive policies positively influences GBP.
- The UK Employment and US CPI Inflation Report will receive attention later Tuesday.
The GBP/USD is likely to approach 1.3195 in early trading on Tuesday. The British pound has gained strength against the US dollar, thanks in part to favorable news regarding the recent US-UK trade agreement. Later in the day, the UK employment figures and the US inflation report are set to be released.
Recently, US President Donald Trump announced he would maintain a 10% tariff on most UK goods imports while also increasing tariffs on automotive, iron, and aluminum imports from the UK. This development around the US-UK trade deal has bolstered the pound.
In addition, the Bank of England’s approach to implementing progressive and judicious policies has given GBP an additional advantage. Last week, the central bank cut rates by a quarter percentage point in a split decision, indicating that concerns from Trump’s global trade tensions haven’t derailed its cautious policy measures. At its February meeting, the BOE estimated that the UK’s economic growth could be between 0.75% and 1%.
Traders are looking forward to the US Consumer Price Index (CPI) release on Tuesday. This report could shed light on whether the Federal Reserve might restart its monetary policy easing in its next meeting. If the CPI results exceed expectations, it could boost the dollar against GBP in the near term.
