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The GBP/USD pair climbed 1.35% on Monday, surpassing the 1.2300 mark. This rise comes as markets react to President Donald Trump’s decision to backtrack on day-one tariffs. Traders are now eagerly awaiting the release of UK labor and employment figures on Tuesday.
Market Reaction to Trump’s Tariff Reversal
The market’s relief was palpable as newly re-elected President Donald Trump pivoted away from his initial plan to impose broad, sweeping trade tariffs on his first day in office. Although Trump continues to review trade relations with key allies, he has already shown signs of wavering on his campaign promises to implement tariffs of at least 20% across the board, with a specific threat of a 65% import tariff on China.
UK Labor Figures in Focus
The UK Claimant Count change for December is expected to rise by 10.3K, a significant increase from the previous month’s 0.3K. Despite this, the UK’s ILO Unemployment Rate for the three months ending in November is anticipated to remain steady at 4.3%.
US Data Releases
On the US side, data releases are sparse until Friday’s S&P Global Purchasing Managers Index (PMI). Market forecasts predict a mixed outcome, with the Services component expected to decline while the Manufacturing component shows a slight uptick.
GBP/USD Price Forecast
With the Pound Sterling gaining traction on Monday, GBP/USD rose over 1.3% and cleared the 1.2300 level. However, near-term bullish momentum is largely dependent on broad-market weakness in the Greenback. The pair remains below the 200-day and 50-day Exponential Moving Averages (EMA), which are near 1.2730 and 1.2540, respectively.
Last week, GBP/USD hit a fresh 15-month low at the 1.2100 level, concluding a four-month decline. The pair has closed either flat or in the red for all but two of the last 15 consecutive trading weeks.
