Policy and protectionism to GBP in 2025?

GBP/USD Annual Price Forecast: Policy and protectionism to Pound Sterling in 2025?

Unlike several unknowns looming at the onset of 2024, the Pound Sterling (GBP) gears up for the global implications of US President-elect Donald Trump’s protectionist policies and the path of monetary policies adopted on both sides of the Atlantic as 2025 unfolds. Meanwhile, the US Dollar (USD) holds an edge due to the US-UK macroeconomic divergence and its safe-haven status as markets stay vigilant over unprecedented geopolitical tensions that have emerged as key risks across the financial markets since 2022.

Reviewing the GBP/USD 2024 journey, the Pound Sterling failed to sustain the turnaround against the USD from a four-decade low of 1.0339 set in September 2022. The US Dollar staged a strong comeback in the final quarter, triggering a steep correction in the pair from 30-month highs of 1.3434 to settle roughly 1% lower in the year. Read more…

GBP/USD Forecast: Pound Sterling stabilizes below 1.2600

After suffering large losses on Wednesday and Thursday, GBP/USD corrected higher on Friday but ended up closing the week in the red. The pair stays in a consolidation phase below 1.2600 early Monday as trading conditions remain thin ahead of the Christmas holiday.

The Federal Reserve’s (Fed) hawkish dot plot and the Bank of England relatively dovish language following the last policy meeting of the year triggered a sharp decline in GBP/USD. The positive shift seen in risk mood heading into weekend on US Congress’ avoidance of a government shutdown caused the US Dollar (USD) to weaken against its rivals and helped the pair erase a portion of its weekly losses. Read more…