GBP/USD edges higher above 1.3350 as Trump’s attacks on Powell threaten Fed’s independence
GBP/USD remains strong near 1.3370 in Tuesday’s early Asian session.
Trump slams the Fed’s Powell for not cutting interest rates.
Cooler UK inflation data and global uncertainty have paved the way for BoE rate reductions.
The GBP/USD pair trades in positive territory around 1.3370 during the early Asian session on Tuesday. Fears of a slowdown in the United States (US) and concerns over the Federal Reserve (Fed) independence drag the US Dollar (USD) lower and create a tailwind for a major pair.
US President Donald Trump slammed the Fed’s Powell for continuing to support a “wait and see” mode on the monetary policy until greater clarity over how the new tariff policy will shape the economic outlook. Trump warned in a Truth Social post that the US economy would slow unless Powell lowered interest rates immediately.
Meanwhile, the US Dollar Index (DXY), an index of the value of the USD measured against a basket of six world currencies, currently trades near 98.30, the lowest since March 2022. The heightened uncertainty around Trump’s tariffs and rising trade tensions between the US and China undermine the USD across the board.
On the other hand, softer UK March Consumer Price Index (CPI) inflation data and global uncertainty have paved the way for an interest rate cut by the Bank of England (BoE) in May’s policy meeting. Financial markets are now betting on an interest rate cut from the BoE meeting at its May meeting, estimating an 86% possibility, according to the LSEG data. This, in turn, could weigh on the Pound Sterling (GBP) against the Greenback.
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