GBP\/USD held near 1.3610 in Asian trading on Friday, after rising nearly 1% the day before. The US Dollar firmed on safe-haven demand linked to the ongoing Middle East conflict.<\/p>\n
US President Donald Trump said the naval blockade of Iranian ports would continue, while concerns remained that the Strait of Hormuz may not reopen soon. He also criticised efforts in Congress to limit his war powers, including a Senate proposal that was rejected on Thursday.<\/p>\n
On Thursday, GBP\/USD rose 0.96% and finished near 1.3600 after testing about 1.3455 earlier in Europe. The session produced a long lower wick on the daily candle, with price stalling near the 1.3600 level later on.<\/p>\n
The Bank of England kept the Bank Rate at 3.75% by an 8-1 vote, with Huw Pill calling for a 25 basis point rise. In the US, March PCE inflation was 3.5% year on year, and preliminary Q1 GDP growth was 2% versus a 2.3% consensus.<\/p>\n
GBP\/USD was up about 0.78% on Thursday and was last noted at 1.3581, with a bullish engulfing pattern in view. The pair cleared resistance around 1.3560\/65, while the RSI moved above 60.<\/p>\n
We are looking at a very different picture today, May 1, 2026, compared to the bullish sentiment for GBP\/USD back in 2025. The pair was trading around 1.3600 then, buoyed by a hawkish Bank of England that held its rate at 3.75%. Today, we see the pound struggling near 1.2550 as the economic landscape has completely shifted.<\/p>\n
The Bank of England\u2019s hawkish stance from 2025 has fully reversed as inflationary pressures have eased significantly. UK CPI for March 2026 came in at just 2.1%, allowing the Monetary Policy Committee to cut the Bank Rate to its current 2.50%. This policy divergence makes holding sterling far less attractive than it was previously.<\/p>\n
In contrast, the US economy has shown continued resilience, with the latest Non-Farm Payrolls report for April 2026 adding a solid 210,000 jobs. With US core inflation proving sticky at 2.8%, the Federal Reserve is holding its key rate firm at 3.00%. This interest rate differential of 0.50% in favor of the dollar is a primary driver for the pair’s downward trend.<\/p>\n
The safe-haven demand for the US Dollar driven by Middle East tensions in 2025 has also receded from the headlines. While geopolitical risks are ever-present, the market\u2019s focus has shifted decisively back to these clear economic fundamentals. This makes the contrast in monetary policy between the US and the UK the main story for traders.<\/p>\n
Given this environment, we see opportunities in positioning for further sterling weakness in the coming weeks. Options traders could consider buying GBP\/USD puts to speculate on a move lower toward the 1.2400 support level. Selling out-of-the-money call options offers another strategy to collect premium with a bearish-to-neutral view on the pair.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/USD hovered near 1.3610 as dollar gains on Middle East fears followed pair\u2019s sharp rebound Thursday.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-46378","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/46378","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=46378"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/46378\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=46378"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=46378"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=46378"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}