GBP/USD Outlook: Pound Sterling a Buy Today on Post-Tariff Dollar Slide

April 3, 2025 - Written by Tim Boyer

STORY LINK GBP/USD Outlook: Pound Sterling a Buy Today on Post-Tariff Dollar Slide

The Pound US Dollar exchange rate rallied on Thursday after markets digested President Trump's slew of global trade tariffs.

At the time of writing, GBP/USD was trading at approximately $1.3115, 0.86% higher on the day.

US Dollar (USD) Dented as Markets await Tariffs

The GBP/USD pair traded sideways on Wednesday as markets awaited US President Donald Trump’s tariff announcement.

On Wednesday, the US Dollar (USD) declined against most of its counterparts as markets braced for the release of Donald Trump’s ‘liberation day’ tariffs.

In anticipation, a generally optimistic market sentiment emerged, reducing the demand for safe-haven currencies such as the ‘Greenback’ amid concerns about a potential US recession following the announcement.

This apprehension led to USD exchange rates falling against nearly all of its rivals, as investors in the American currency appeared hesitant to make significant moves.

On Wednesday, the Pound (GBP) fluctuated against its rival currencies amid a cheery market mood leading up to Donald Trump's tariff announcement.

Due to its sensitivity to risk, the Pound saw a slight dip against more volatile currencies but held its ground against its safe haven peers.

This cautious approach among GBP investors was likely reinforced by Tuesday's confirmation that the UK would not be exempt from the initial round of US tariffs, contrary to earlier beliefs.

On Thursday, the primary factor influencing the Pound US Dollar exchange rate will likely be market reaction to Donald Trump's tariff announcement.

This announcement is expected to have significant implications for global trade and could introduce volatility into currency markets.

In addition to the tariff news, economic data releases will also play a role. The US will unveil its latest ISM services PMI for March, while the UK will publish its final services PMI for the same month.

Both the US and UK reports are expected to show robust growth in their respective services sectors.

If the data meets or exceeds expectations, it could provide a modest boost to both the US Dollar and the Pound as the week progresses.

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TAGS: Pound Dollar Forecasts