The GBP/USD pair retreated on Tuesday during Asian trading, hovering around 1.2970 after gaining in the previous session. The pair faces renewed pressure as the US Dollar (USD) attempts to recover from its recent losses, though downside movement may be limited due to persistent economic concerns in the United States.
The US Dollar Index (DXY), which measures the USD against a basket of six major currencies, traded positively around 103.50 at the time of writing. However, the Greenback remains vulnerable as weak US economic data and heightened trade tensions—exacerbated by former President Donald Trump’s tariff threats—fuel investor uncertainty.
Recent data from the US Census Bureau revealed that February’s retail sales rose by just 0.2% month-over-month, falling short of the expected 0.7% and raising concerns about a slowdown in consumer spending. This followed a downwardly revised 1.2% decline in January. On an annual basis, retail sales growth slowed to 3.1% from a revised 3.9% in January. These figures reinforce expectations that the Federal Reserve (Fed) will maintain its current monetary policy stance when it concludes its two-day meeting on Wednesday.
Meanwhile, the Pound Sterling (GBP) may find support ahead of the Bank of England’s (BoE) policy meeting on Thursday. The central bank is widely expected to hold interest rates steady, balancing sluggish economic growth with persistent inflation risks. In February, the BoE cut rates to 4.5% and revised its 2025 growth forecast downward to 0.75%, citing concerns over tax increases and global trade uncertainties.
As a result, the GBP/USD pair remains sensitive to monetary policy decisions and broader market sentiment, with traders closely watching upcoming economic data and central bank statements for further direction.
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