GBP/USD held steady around 1.2920 during the Asian session on Tuesday (3/25) after a surge in the previous session. However, the pair held steady amid a US Dollar (USD) correction. The greenback strengthened, supported by strong S&P Services PMI data and cautious remarks from Federal Reserve officials.
The S&P Global Services PMI jumped to 54.3 in March, the highest in three months, up from 51.0 in February and surpassing market expectations of 50.8. The services sector rebounded sharply from a 15-month low, while the Composite PMI rose to 53.5, marking its strongest expansion since December 2024.
Atlanta Fed President Raphael Bostic warned of persistent economic uncertainty, suggesting inflation progress may be slower than anticipated. He revised down his 2025 interest rate cut expectations, citing ongoing price pressures and trade-related risks.
The risk-sensitive GBP/USD pair could face headwinds as traders remain cautious ahead of US President Donald Trump's scheduled tariff announcement on April 2. While Trump hinted that "many" countries could receive exemptions, the details of the tariff plan remain uncertain.
Meanwhile, the Pound Sterling (GBP) gained support from strong UK PMI data, which signaled an economic recovery. The latest figures showed significant growth in the services sector, driven by demand in financial and consumer services. As a result, traders now see a 60% chance of a quarter-point interest rate cut by the Bank of England (BoE) in May, down from previous expectations of a more aggressive easing path. (Newsmaker23)
Source: FXstreet
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