Pound Sterling Weakens Against US Dollar as Trump’s Tax Agenda Advances

GBP/USD is attempting a fresh increase from the 1.2600 zone. EUR/GBP is gaining pace and might extend its upward move above the 0.8300 zone.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

The British Pound is attempting a decent increase above the 1.2620 zone against the US Dollar.

There is a connecting bullish trend line forming with support at 1.2625 on the hourly chart of GBP/USD at FXOpen.

EUR/GBP started a fresh increase above the 0.8285 resistance zone.

There is a major bullish trend line forming with support at 0.8300 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair started a downside correction from the 1.2690 zone. The British Pound traded below the 1.2650 zone against the US Dollar.

A low was formed near 1.2605 and the pair is now attempting a recovery wave. There was a break above the 50% Fib retracement level of the downward move from the 1.2690 swing high to the 1.2605 low.

The pair even spiked above the 76.4% Fib retracement level of the downward move from the 1.2690 swing high to the 1.2605 low and settled above the 50-hour simple moving average.

On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.2675. The next major resistance is near the 1.2690 level. If the RSI moves above 60 and the pair climbs above 1.2690, there could be another rally. In the stated case, the pair could rise toward the 1.2750 level or even 1.2820.

On the downside, there is a major support forming near 1.2625. There is also a connecting bullish trend line forming with support at 1.2625. If there is a downside break below the 1.2625 support, the pair could accelerate lower.

The next major support is near the 1.2605 zone, below which the pair could test 1.2560. Any more losses could lead the pair toward the 1.2525 support.

EUR/GBP Technical Analysis

On the hourly chart of EUR/GBP at FXOpen, the pair started a fresh increase from the 0.8265 zone. The Euro traded above the 0.8285 level to move into a positive zone against the British Pound.

The EUR/GBP chart suggests that the pair settled above the 50-hour simple moving average and 0.8300. Immediate resistance is near 0.8305. The next major resistance for the bulls is near the 0.8320 zone.

A close above the 0.8320 level might accelerate gains. In the stated case, the bulls may perhaps aim for a test of 0.8365. Any more gains might send the pair toward the 0.8400 level in the coming days.

Immediate support sits near a major bullish trend line at 0.8300 and the 23.6% Fib retracement level of the upward move from the 0.8275 swing low to the 0.8305 high. The next major support is near the 0.8285 zone.

The 61.8% Fib retracement level of the upward move from the 0.8275 swing low to the 0.8305 high is also at 0.8285. A downside break below the 0.8285 support might call for more downsides.

In the stated case, the pair could drop toward the 0.8265 support level. Any more losses might send the pair toward the 0.8240 level in the near term.

Source: ACTIONFOREX

The US Dollar (USD) holds its ground against its rivals early Wednesday as markets adopt a cautious stance. The US economic calendar will feature New Home Sales data for January. Later in the American session, Atlanta Federal Reserve President Raphael Bostic and Richmond Federal Reserve President Thomas Barkin will be delivering speeches. 

US Dollar PRICE This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the Swiss Franc.

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Falling US Treasury bond yields after US Treasury Secretary Scott Bessen said that the Trump administration will find a way to reduce spending and ease monetary policy at the same time weighed on the USD on Tuesday. As the benchmark 10-year US T-bond yield fell more than 2% on the day, the USD Index lost about 0.4%. Early Wednesday, the 10-year yield stays in positive territory above 4.3% and the USD Index clings to recovery gains at around 106.50.

Meanwhile, US President Donald Trump's trade adviser, Peter Navarro, said that tariff negotiations are ongoing with Canada and Mexico and noted that they will set a reciprocal tariff for digital services tax. Additionally, Trump signed an executive order late Tuesday to launch an official probe into copper markets, specifically an investigation into pricing of futures and delivery markets, citing national security concerns.

EUR/USD rose more than 0.4% on Tuesday but lost its bullish momentum early Wednesday. At the time of press, the pair was trading marginally lower on the day, a few pips below 1.0500. Earlier in the day, the data from Germany showed that the GfK Consumer Confidence Index for March dropped to -24.7 from -22.6.

Following Monday's decline, GBP/USD registered small gains on Tuesday. In the European morning on Wednesday, the pair fluctuates in a tight channel at around 1.2650.

AUD/USD failed to benefit from the selling pressure surrounding the USD and closed in negative territory for the third consecutive trading day on Tuesday. The pair stays on the back foot early Wednesday and trades below 0.6350. In the Asian session, the data from Australia showed that the annual Consumer Price Index (CPI) rose 2.5% in January, matching December's increase.

USD/JPY lost nearly 0.5% on Tuesday and registered its lowest daily close since early October. The pair stages a rebound in the European morning on Wednesday and trades near 149.50.

Gold came under heavy selling pressure on Tuesday and lost more than 1% on the day. After touching its lowest level in over a week at $2,888, however, XAU/USD managed to erase a portion of its daily losses to close above $2,900. As of writing, the pair was moving up and down in a tight channel slightly above $2,910.

Source: FXSTREET

Source: AP

EUR/GBP remains under pressure as Germany’s GfK Consumer Confidence Survey dropped to -24.7 for March. 

The Euro may face further headwinds with the ECB widely expected to cut interest rates next week. 

UK Prime Minister Keir Starmer has announced plans to raise defense spending to 3% of the country’s economic output.

EUR/GBP posts losses after registering gains in the previous two successive days, trading around 0.8300 during the early European hours on Wednesday. The currency cross holds losses following the release of Germany’s GfK Consumer Confidence Survey, which fell to -24.7 for March 2025, down from a slightly revised -22.6 in the prior period and below market expectations of -21.4. This represents the lowest level since April 2024, highlighting ongoing challenges for the new government, such as persistent cost pressures, political uncertainty, and a surge in corporate bankruptcies.

Traders closely monitor remarks from European Central Bank (ECB) officials ahead of next week’s policy meeting, where the ECB is widely expected to cut interest rates for the fifth consecutive time.

On Tuesday, ECB board member Isabel Schnabel argued that subdued growth should not be automatically interpreted as evidence of restrictive policy, according to a report from Reuters. Schnabel noted that "the natural rate of interest in the Euro area has increased appreciably over the past two years" and suggested that "the nature of the inflation process is likely to have changed lastingly."

ECB policymaker Martins Kazaks expressed support for continued rate cuts, emphasizing the need to approach them step by step. Meanwhile, ECB’s Joachim Nagel indicated that further rate cuts remain possible if inflation continues to ease toward the 2% target.

In the United Kingdom (UK), Prime Minister Keir Starmer has unveiled plans for a significant boost in defense spending, aiming to increase it to 3% of the nation’s economic output over the next decade, according to Bloomberg. This move comes as European governments work to strengthen their security amid uncertainty over US support under Donald Trump’s leadership.

Addressing the House of Commons on Tuesday, Starmer described the initiative as “the biggest sustained increase in defense spending since the end of the Cold War.” Ahead of his upcoming visit to Washington later this week, he confirmed that the initial funding for this increase would come from cuts to overseas development spending, with no plans to raise taxes or increase borrowing.

Source: FXSTREET

Petroliam Nasional Bhd (Petronas) and Vietnam Oil and Gas Group (Petrovietnam) will expedite cooperation in Vietnam’s energy sector, encompassing upstream and downstream activities, gas, and renewable energy (RE), said Prime Minister Datuk Seri Anwar Ibrahim.

He said that with a focus on RE, both countries' oil companies are actively enhancing collaboration in power generation and grid connectivity from Vietnam to Malaysia.

“This initiative aligns with the Asean Power Grid (APG) aspiration to strengthen energy security in the Asean region through energy infrastructure integration,” he said in a post on his official Facebook page

Anwar met with Vietnam’s Prime Minister Pham Minh Chinh during a breakfast session, as part of his two-day working visit to Vietnam, which began on Tuesday.

Anwar highlighted that Malaysia is seriously investing in green energy, including wind-based energy projects in southern Vietnam, and major initiatives such as the Gentari-Petrovietnam collaboration.

"This reflects a strategic move to strengthen regional energy security and ensure a more sustainable transition," he said.

He added that Malaysia and Vietnam share strong network ties, further reinforced by the Comprehensive Strategic Partnership.

"This is not just an agreement on paper but a commitment to deepening cooperation in key sectors, namely trade, investment, green energy, digital technology, and regional security," said Anwar.

At the same time, he emphasised that Malaysia foresees significant potential in the semiconductor industry, artificial intelligence (AI) and digital economy, and that it is ready to enhance the integration of supply chains between both countries.

"Malaysian investors have played a key role in Vietnam’s economic landscape, and we want to see more joint ventures in high-impact projects," he added.

Meanwhile, trade between Malaysia and Vietnam in 2024 rose by 4.4% to US$18.4 billion (RM83.11 billion), from US$17.38 billion in the previous year, reflecting growing trade between the two Asean members.

Vietnam was Malaysia’s 11th largest trading partner in 2024, accounting for 2.9% of Malaysia’s total trade. It was also Malaysia’s 10th largest export destination with a 3.6% share, and the nation’s 13th largest import source with a 2.1% share of Malaysia’s total imports.

Source: Theedgemarkets