GBPUSD: SELL 1.2660, SL 1.2700, TP 1.2600 | 28 February 2025

Event to watch out for today:

15:30 EET. USD - Core PCE Price Index

GBPUSD:

The GBP/USD pair is declining after two consecutive sessions of gains, trading near 1.2660 during Asian hours on Thursday. The pair is losing ground as the US dollar (USD) strengthens amid increased risk aversion and rising US Treasury yields.

Federal Reserve Bank of Atlanta President Raphael Bostic said late Wednesday that the Fed should maintain current interest rates to continue to put downward pressure on inflation, Bloomberg reported. Bostic said more data is needed to determine whether January's inflation was a temporary spike or the start of a trend. He emphasized that the Fed's policy remains restrictive and should remain so.

Late Wednesday, U.S. Commerce Secretary Howard Lutnick announced that April 3 would be the baseline day for reciprocal tariff data. He also said that Chinese cars will not be allowed into the US, citing China as a major concern. Separately, U.S. Treasury Secretary Scott Bessent reiterated his willingness to work with Congress to make President Trump's tax cuts permanent.

Bank of England (BoE) Monetary Policy Committee member Swati Dhingra on Wednesday noted that a US tariff hike could strengthen the US dollar in the short term, leading to some price increases in the United Kingdom (UK). However, she noted that the overall inflationary impact in the UK is likely to be offset by a reduction in global price pressures caused by these tariffs.

Trading recommendation: SELL 1.2660, SL 1.2700, TP 1.2600

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