GBP/USD extended its decline for the fourth straight session, trading around 1.2420 during Asian hours on Friday (1/31). The decline was driven by the US Dollar (USD) improving amid rising risk aversion following new tariff threats from US President Donald Trump.

President Trump reiterated plans late Thursday to impose a flat 25% import tax on all goods entering the US from Canada and Mexico, citing concerns over fentanyl. The first wave of tariffs on the two countries will take effect on February 1, according to Reuters. Additionally, Trump hinted at the possibility of imposing tariffs on Canadian and Mexican oil exports. He also reiterated his threat on X (formerly Twitter) to impose 100% tariffs on BRICS countries if they try to introduce alternative currencies to challenge the US dollar in international trade.

The US Dollar Index (DXY), which measures the value of the US Dollar against a basket of six major currencies, was trading above 108.00 at the time of writing. The greenback strengthened after the US Federal Reserve (Fed) was cautious about its policy decision in January. (AL)

Source: FXstreet