The British Pound continues to lose ground against the US Dollar, with GBP/USD falling for the sixth straight session, trading near 1.3560 during early Friday trading in Asia. The continued decline reflects persistent strength in the US Dollar, driven by evolving policy signals from Federal Reserve officials.
On Thursday, Chicago Fed President Austan Goolsbee dismissed calls for interest rate cuts aimed at easing the cost of US government borrowing, emphasizing that the central bank remains focused on employment and inflation. Meanwhile, the Federal Open Market Committee’s (FOMC) minutes from its June meeting revealed a cautious stance, with policymakers in no rush to adjust rates until further economic clarity emerges.
However, the Dollar’s momentum could face resistance if new US trade policies begin to weigh on sentiment. President Donald Trump announced a 35% tariff on Canadian imports starting August 1 and hinted at similar measures targeting the European Union, potentially curbing the Dollar’s rally.
The Pound, on the other hand, is also under pressure from mounting domestic economic risks. Market participants are awaiting the UK’s GDP data for May, which is expected to offer fresh insights into the economy’s health. Additionally, the Bank of England’s latest Financial Policy Committee (FPC) report issued a stark warning, citing elevated risks of market volatility, geopolitical instability, and fragmentation in global trade and finance.
The FPC stated that the likelihood of sharp asset price corrections and abrupt shifts in investment patterns remains high, largely due to rising sovereign debt stress and persistent geopolitical tensions—factors that continue to cast a shadow over the UK’s economic outlook.
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