The GBP\/USD pair rose to its highest since mid-September, trading near 1.3660 during the European session. This increase was driven by stronger-than-expected UK Retail Sales and PMI data. The release of the US November Durable Goods Orders report later on Monday could impact currency movements.<\/p>\n
UK Retail Sales, as published by the Office for National Statistics, rose by 0.4% in December, compared to a 0.1% decline in November. This was contrary to predictions of a further 0.1% fall. The British Pound’s strength is partially due to a broadly weaker US Dollar, which hit a four-month low on Monday.<\/p>\n
The decline of the US Dollar is attributed to geopolitical tensions, including US President Donald Trump’s stance on Greenland. In turn, this has contributed to the ‘Sell America’ sentiment. The GBP\/USD pair experienced some intraday gains, trading above the mid-1.3600s and poised for further appreciation.<\/p>\n
On Friday, the British Pound outperformed the US Dollar with a climb around the 1.3600 handle. UK economic data’s strength may affect the Bank of England’s near-term rate cut expectations. The currency pair showed an increase of nearly 0.73% on the day.<\/p>\n
Given the strength in the Pound Sterling, we see GBP\/USD holding firm above the 1.3650 mark. This momentum is fueled by strong UK economic data from late 2025, which has pushed back expectations of any near-term interest rate cuts from the Bank of England. The pair is now trading at its highest level in over four months.<\/p>\n
For those looking to capitalize on this upward trend, buying call options on GBP\/USD seems like a prudent strategy. This approach allows us to capture potential gains if the rally continues towards the 1.3800 level, while keeping our downside risk limited to the premium paid. The underlying positive sentiment for the pound makes this a compelling trade.<\/p>\n
This bullish view on the pound is reinforced by the latest UK inflation figures released last week, which showed CPI for December holding at 2.8%, slightly above the Bank of England’s target. Additionally, UK unemployment recently fell to 3.7%, a multi-year low that further supports the case for a robust economy. These statistics suggest the BoE will remain on hold, which is supportive for Sterling.<\/p>\n
On the other side of the pair, the US Dollar continues to show broad weakness, with the Dollar Index (DXY) hitting fresh lows. The disappointing US Non-Farm Payrolls report from early January, which showed only 95,000 jobs added against an expected 180,000, has intensified bets on a Federal Reserve rate cut by March. This growing policy divergence between the Fed and the BoE is a primary driver of the current GBP\/USD rally.<\/p>\n
We saw a similar dynamic in early 2021, when optimism around the UK economy and a weakening dollar propelled the pair significantly higher. Considering this historical precedent, call options with strike prices near 1.3750 and 1.3800 for February or March expiries could offer good value. This allows time for the current trend to fully play out.<\/p>\n
Traders who are less certain of the direction but anticipate a significant price move could consider volatility strategies. With key central bank meetings scheduled for February, a long straddle could be effective. This would involve buying both a call and a put option at the same strike price to profit from a breakout in either direction.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Stronger UK data and a weaker US Dollar push GBP\/USD to mid-September highs near 1.3660 level.<\/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-40103","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\/40103","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=40103"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40103\/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=40103"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=40103"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=40103"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}