GBP/USD opens with a modest gap down at the start of a new week and trades just below the mid-1.3400s during the Asian session, down 0.10% on the day. However, spot prices lacked a follow-up sell-off and managed to hold above last week’s swing lows amid mixed fundamental signals.
Against the backdrop of the long-running war between Russia and Ukraine and turmoil in the Middle East, the US military attack on Venezuela increases concerns about escalating geopolitical tensions and drives some safe-haven flows towards the US dollar (USD). This is helping the US Dollar Index (DXY), which tracks the greenback against a basket of currencies, build on its recent rebound from the lowest level since early October, and is turning out to be a major factor putting pressure on the GBP/USD pair.
However, speculation about interest rate cuts by the US Federal Reserve in March and perhaps others later this year may prevent any further rise in the US dollar. On the other hand, the British pound continues to draw support from easing concerns about the UK budget. Moreover, the Bank of England’s (BoE) hawkish outlook indicates a significant divergence compared to the Fed and should further contribute to limiting the downside in GBP/USD.
As expected, the Bank of England cut interest rates by 25 basis points to 3.75% in December, with a 5-4 vote. The narrow split in votes indicated differences within the committee against the backdrop of the recent inflation surprise. This in turn has forced investors to scale back their expectations for further aggressive easing by the Bank of England this year, which should act as a tailwind for GBP/USD ahead of important US economic releases scheduled at the start of the new month.
US dollar price today
The table below shows the percentage change in the US Dollar (USD) against the major currencies listed today. The US dollar was the strongest against the Australian dollar.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | 0.07% | 0.09% | 0.14% | 0.09% | 0.17% | 0.14% | 0.00% | |
| euro | -0.07% | 0.02% | 0.11% | 0.00% | 0.10% | 0.07% | -0.07% | |
| GBP | -0.09% | -0.02% | 0.06% | -0.01% | 0.10% | 0.05% | -0.09% | |
| JPY | -0.14% | -0.11% | -0.06% | -0.07% | 0.01% | -0.02% | -0.15% | |
| Canadian | -0.09% | -0.01% | 0.00% | 0.07% | 0.09% | 0.06% | -0.08% | |
| Australian dollar | -0.17% | -0.10% | -0.10% | -0.01% | -0.09% | -0.03% | -0.17% | |
| New Zealand dollar | -0.14% | -0.07% | -0.05% | 0.02% | -0.06% | 0.03% | -0.14% | |
| Swiss franc | -0.00% | 0.07% | 0.09% | 0.15% | 0.08% | 0.17% | 0.14% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select USD from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
