GBP/USD strengthened on Thursday (2/13), rising more than nine-tenths of a percent to touch the 1.2560 region after economic data came out generally better than expected on both sides of the Atlantic. UK Gross Domestic Product (GDP) beat market forecasts, and US Producer Price Index (PPI) inflation figures eased investor concerns after a surge in consumer inflation this week.
US President Donald Trump unveiled his latest idea for raising tax revenues in the face of sharp administrative tax cuts. "Reciprocal tariffs," a plan to impose fees on countries that impose tariffs on US goods, are set to take shape in the coming months, with US Commerce Secretary Howard Lutnick tapped to work out the details.
The timeline for the threat of further tariffs remains unclear, and investors are pricing in the new tariffs as something that will not happen, such as President Trump's "day one tariffs," and tariffs on Canada and Mexico, and specific tariffs on cars, microchips, and pharmaceuticals. Overall, there are plenty of conceptual plans to impose high import taxes on US consumers and businesses, but very little real progress, and investors are betting that the trend will continue. (Newsmaker23)
Source: FXstreet
