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The Pound Sterling weakened against the US Dollar on Monday, falling below the 1.2400 level to 1.2385, a 0.16% decline. This drop occurred following announcements of new US tariffs on aluminum and steel, with hints of additional tariffs to come. The Sterling’s pair is trading at 1.2375 at the time of writing.
Despite the tariff news, overall market sentiment remains positive. The tariff announcements, made on Sunday, include a 25% tariff on aluminum and steel, with potential reciprocal tariffs as early as Tuesday or Wednesday.
The economic calendar is light, leaving market participants focused on central bank activity. Bank of England member Catherine Mann, who recently shifted from a hawkish stance to advocating for substantial rate cuts, is scheduled to speak on Tuesday. Her comments will be closely watched.
In the US, traders are awaiting Federal Reserve (Fed) Chair Jerome Powell’s testimony before Congress on Tuesday. Upcoming US inflation data is expected to remain near 3%, while January retail sales figures are projected to show a slight contraction.
From a technical perspective, the GBP/USD pair exhibits a downward bias. After reaching a high of 1.2421, buyers were unable to maintain momentum above 1.2400. Continued weakness could lead to tests of the February 6 low of 1.2359 and the February 3 low of 1.2249.
