The Pound Sterling (GBP) is trading flat against the US Dollar (USD) around 1.3380 during the North American session after peaking at 1.3413. Strong US data this week limited the Pound\u2019s earlier gains, creating distance from the 200-day SMA level at 1.3405.<\/p>\n
On Friday, GBP is cuting prior losses against USD, returning above 1.3400 before the US market opens, rising from Thursday’s low of 1.3360. The pair seems set to close the week without much movement after experiencing a 0.7% decrease over the last fortnight.<\/p>\n
The Pound remains weak against the strong USD, trading near its four-week low close to 1.3360 during European trade. The Dollar maintains strength on speculation that the Federal Reserve may halt its monetary-easing efforts in the upcoming policy meeting.<\/p>\n
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The market is fixated on the strong US Dollar, driven by expectations that the Federal Reserve will halt its easing program. We saw robust job growth figures at the end of 2025, with non-farm payrolls consistently beating expectations, which supports this view. This makes betting against the dollar a risky proposition in the near term.<\/p>\n
For GBP\/USD, the pair is struggling to stay above the 1.3400 level, which is a key technical resistance point for us. The sluggish UK economic performance we tracked in the latter half of 2025, including stagnant GDP growth, contrasts sharply with the resilient US economy. This fundamental divergence suggests that buying put options on the Pound Sterling could be a prudent strategy to speculate on further weakness.<\/p>\n
This dollar strength is also pressuring other assets, as seen with gold’s recent pullback from its highs near $4,600. Similarly, the EUR\/USD pair has slipped towards the 1.1600 mark, reflecting the same sentiment about the Fed’s policy path. Traders should consider the impact of the upcoming US PCE inflation data, as a high reading will likely cement the Fed’s hawkish pause.<\/p>\n
With the Federal Reserve’s meeting just around the corner, we can expect a significant increase in volatility. Options traders could look at strategies like long straddles on major pairs to play a potential sharp move, regardless of the direction. The pricing of short-dated options implies the market is bracing for a decisive statement from the central bank.<\/p>\n
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