GBP\/USD rose 0.31% on Monday to 1.3507, after rebounding from 1.3475. The US Supreme Court rejected tariffs imposed under the International Emergency Economic Powers Act (IEEPA) national emergency.<\/p>\n
The court said duties set under a national emergency are illegal and that Congress, not the president, has the authority to impose taxes and tariffs. Donald Trump then said he would set 10% global tariffs, later raised to 15% under Section 122 for 150 days, with extensions requiring Congress\u2019 approval.<\/p>\n
US Trade Representative Jamieson Greer said trade deals remain in place. US Factory Orders fell 0.7% month on month in December, after a 2.7% rise in November, linked to weaker commercial aircraft bookings.<\/p>\n
Fed Governor Christopher Waller said he would support more easing if January Nonfarm Payrolls are revised down. Otherwise, he favours holding rates if the trend continues in February.<\/p>\n
In the UK, markets expect a 25 basis point Bank of England rate cut on 19 March. UK unemployment rose after a weaker jobs report, while inflation fell to its lowest level since March 2025.<\/p>\n
On the chart, GBP\/USD is near 1.3505, with resistance around 1.3532. The broader uptrend is supported by a rising trend line from 1.3035.<\/p>\n
We are seeing significant tension in the GBP\/USD pair, driven by conflicting forces from both sides of the Atlantic. The recent Supreme Court decision against emergency tariffs has weakened the dollar, but the immediate announcement of new 15% tariffs keeps trade policy uncertainty extremely high. This environment suggests that volatility is likely to be the main theme in the coming weeks.<\/p>\n
On the US side, the economic picture is softening, supporting the case for a weaker dollar. The poor factory orders data from back in December 2025 was an early warning, and more recent data shows this trend continuing, with the preliminary February Manufacturing PMI for 2026 dipping to 49.8, signaling a slight contraction. All eyes will now be on the February Nonfarm Payrolls report in early March to see if the Fed gets the justification it needs to consider easing policy.<\/p>\n
Meanwhile, the case for a weaker pound is also building, creating a classic tug-of-war. Following last week\u2019s disappointing jobs and inflation reports, market expectations for a Bank of England rate cut have solidified. As of today, overnight index swaps are pricing in an 85% probability of a 25-basis-point rate cut at the March 19 meeting, a sharp increase from just 50% at the start of the month.<\/p>\n
This divergence between a data-dependent Fed and a clearly dovish BoE creates an unpredictable trading environment. The political noise surrounding Prime Minister Starmer only adds another layer of risk for sterling. Historically, when central bank policies diverge so clearly, it often leads to a sustained trend, but the US trade policy chaos is a powerful wildcard.<\/p>\n
For derivative traders, this setup makes buying volatility an attractive strategy. With key economic data and a BoE decision looming, purchasing a GBP\/USD straddle with a one-month expiry could capture a significant price swing, regardless of the direction. This approach profits from a breakout from the current tight range without having to bet on which catalyst\u2014US tariff fallout or a UK rate cut\u2014will ultimately dominate.<\/p>\n
Alternatively, for those with a directional bias, options can define risk. Traders who believe US uncertainty will be the bigger factor could buy call options to bet on a move higher in GBP\/USD. Conversely, those convinced the BoE will act decisively could buy put options to position for a drop below the key 1.3035 trend line mentioned in the technical analysis.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/USD climbs to 1.3507 as US tariff ruling, Fed\/BoE expectations and UK data steer sentiment.<\/p>\n","protected":false},"author":62,"featured_media":17030,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42607","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\/42607","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=42607"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/42607\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17030"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=42607"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=42607"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=42607"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}