The GBP\/USD pair showed strength, reaching around 1.3400 in the early Asian session on Monday. This movement was spurred by US Dollar weakness, linked to President Trump’s latest tariff threats against Europe over Greenland.<\/p>\n
The US markets were closed for Martin Luther King Jr. Day. Trump proposed a 10% import tariff from February 1 on goods from several European countries, including the UK, to press for the acquisition of Greenland.<\/p>\n
The Pound Sterling began the week strong, rising to 1.3486 after news of criminal charges against Fed Chair Jerome Powell. However, sentiments turned negative as a Bank of England policymaker delivered dovish comments, leading to a shift in focus towards the Federal Reserve\u2019s upcoming monetary policy decision.<\/p>\n
Elsewhere, meme coins such as Dogecoin, Shiba Inu, and Pepe experienced a roughly 3% drop, continuing last week’s decline. These coins traded below key moving averages, suggesting potential momentum changes. Gold hit a new peak of $4,690 due to Trump’s tariff threats and geopolitical risks, sparking caution in the markets.<\/p>\n
Overall, the week’s developments brought volatility, impacting both traditional and digital assets.<\/p>\n
Looking back to this time in 2025, we saw the Pound surge against the Dollar to the 1.3400 level on geopolitical shocks. The market reacted strongly to unexpected tariff threats from the US, reminding us how quickly political news can move currency pairs. That volatility was a key feature of trading this pair a year ago.<\/p>\n
Today, on January 19, 2026, the landscape is driven more by economic fundamentals than by sudden political announcements. The key focus now is the policy divergence between the Bank of England (BoE) and the US Federal Reserve. This makes trading less about reacting to headlines and more about anticipating central bank moves.<\/p>\n
We are watching inflation data closely, as UK inflation remains stickier than in the US, with the last reading for 2025 coming in at 3.9%. In contrast, US inflation has cooled more consistently, giving the Federal Reserve more flexibility. This fundamental difference suggests underlying strength for the dollar against the pound.<\/p>\n
Given this divergence, we believe selling GBP\/USD on any significant rallies could be a prudent strategy in the coming weeks. Using options to buy puts on the pair could also offer a way to profit from a potential downturn while managing risk. The volatility seen last year shows that sudden spikes can provide good entry points for short positions.<\/p>\n
The extreme move in gold to nearly $4,700 an ounce during the 2025 tariff scare was a textbook flight to safety. We should remember this lesson and consider using derivatives on gold as a hedge against any new, unforeseen global risks. Even as we focus on central banks, the potential for a political wildcard event remains.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/USD strengthens amid dollar weakness and geopolitical tensions; crypto and gold markets react to volatility.<\/p>\n","protected":false},"author":62,"featured_media":17031,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-39511","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/39511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=39511"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/39511\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17031"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=39511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=39511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=39511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}