The Pound Sterling (GBP) surges to near 1.2320 against the US Dollar (USD) in Monday's North American Session. The GBP/USD pair strengthens as the US Dollar nosedive soon after reports from the Wall Street Journal (WSJ) showed that there won't be tariff hikes on the first day of President Donald Trump at the White House. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, plummets to near 108.30
According to the WSJ, the presidential memo directs federal agencies to study trade policies and evaluate US trade relationships with China and America's continental neighbors—but stops short of imposing new tariffs on his first day in office. Market participants feared that Trump would be ready with the tariff document that would state the percentage increase in export charges for each nation. Also, the memo highlights China, Canada, and Mexico only.
However, the broader outlook for the US Dollar remains firm as investors expect Trump to announce tariff hikes, sooner or later. His economic policies, including lower taxes, will be pro-growth and inflationary for the United States (US) economy.
The US economic calendar has little to offer this week except for the S&P Global preliminary Purchasing Managers Index (PMI) data for January, which will be published on Friday. Until then, the Greenback will be influenced by market expectations for the Federal Reserve's (Fed) monetary policy outlook for the entire year.
According to the CME FedWatch tool, traders are pricing in more than one 25 bps interest rate cut this year, seeing the first in the June meeting.(Cay) Newsmaker23
Source: fxstreet
