Market Update on GBP/USD

GBP/USD has found a bit of stability after a nearly 1% increase the day before, trading around 1.3610 during Asian hours on Friday. The ongoing conflict in the Middle East is pushing up demand for safe-haven currencies, thus supporting the US dollar. However, not much movement has been seen in the exchange rate.

According to Bloomberg, US President Donald Trump stated on Thursday that he intends to maintain the naval blockade of Iranian ports due to concerns about the potential closure of the key Strait of Hormuz. He also expressed discontent with Congressional measures aimed at limiting his war powers, pointing out a Senate proposal that was rejected earlier that day.

On the US economic front, data released on Thursday indicated that the personal consumption expenditures (PCE) price index rose to 3.5% in March from 2.8% in February—right in line with market expectations. On a monthly basis, there was an increase of 0.7%. The Core PCE Price Index, which is the Federal Reserve’s favored gauge of inflation excluding food and energy, rose by 3.2% year-over-year, again matching analyst predictions, after a 3% rise in February.

Meanwhile, the preliminary annual GDP growth rate for the first quarter of 2026 showed an expansion of 2.0%, which was below the market forecast of 2.3% but an improvement from the prior growth rate of 0.5%.

The Bank of England (BoE) voted 8-1 on Thursday to maintain its key policy interest rate at 3.75%, with chief economist Hugh Pill as the sole dissenter calling for a 25 basis point increase.

BoE Governor Andrew Bailey raised concerns about the threat of a secondary inflation wave during a press conference, implying that the Monetary Policy Committee (MPC) is willing to take preventive action if energy-related price pressures start affecting wages.