Forex News
- GBP/USD gains as Trump signals a Greenland deal with NATO, easing US–Europe trade-war fears.
- Strong US GDP and jobs data fail to lift the Dollar as markets maintain Fed easing expectations.
- Focus turns to UK Retail Sales and US Flash PMIs, Consumer Sentiment for next catalysts.
GBP/USD rises during the North American session on Thursday amid an improvement in risk appetite, following a de-escalation of the trade-war between the US and Europe. Meanwhile, traders shrug off strong US data, which, despite signaling the strength of the economy, failed to underpin the US Dollar (USD). At the time of writing, the pair trades at 1.1357, up 0.24%.
Sterling advances as easing trade tensions outweigh strong US data and keep the Dollar under pressure
On Wednesday, the US President Donald Trump announced that he had reached an agreement with NATO in regard to Greenland, refraining from imposing duties on eight European countries and averting an escalation of the trade war.
Back to economic data, the US Bureau of Economic Analysis revealed Q3 2025 Gross Domestic Product figures, which rose by 4.4% YoY, exceeding estimates of 4.3%. The economy grew, boosted by stronger exports and a reduced drag from inventories.
Jobs data revealed that fewer Americans filed for unemployment benefits last week, according to the Department of Labor. US Initial Jobless Claims report for the week ending January 17 rose to 200K, slightly lower than the 199K of the previous week and below forecasts of 212K. Continuing claims fell to 1.849 million in the previous week, its lowest since November.
Following the data release, the US Dollar Index (DXY) dropped 0.25% to 98.55. Expectations for further rate cuts by the Federal Reserve (Fed) remain consistent, with traders eyeing 42 basis points of easing towards the end of the year.
Across the pond, the UK economic docket remained absent, yet previously released data showed an uptick in inflation. Conversely, the latest jobs report was softer than economists expected, which would warrant lower interest rates by the Bank of England.
Ahead of this week, the UK economic docke will feature Retail Sales for December. In the US, S&P Global Flash PMIs are expected, along with Consumer Sentiment by the University of Michigan.
GBP/USD Price Forecast: Technical outlook
Despite reaching a two-day high of 1.3475, GBP/USD remains consolidated within familiar levels. Although buyers are gaining momentum as measured by the Relative Strength Index (RSI), it remains below its latest peak.
If GBP/USD breaches the January 20 high at 1.3492, the pair could challenge 1.3500, increasing buyers’ chances of seeing higher prices. Once those levels are taken, the next resistance would be the January 6 high at 1.3567.
Conversely, if GBP/USD drops below the 200-day SMA of 1.3406, the next support would be the 50-day SMA at 1.3341.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- Silver holds near record highs as markets draw relief from easing US-EU tensions.
- Safe-haven demand cools, but tight supply and industrial demand continue to underpin prices.
- Bulls remain in control even as momentum indicators point to consolidation.
Silver (XAG/USD) regains some ground on Thursday but lacks follow-through, consolidating near record highs as a modest improvement in risk sentiment tempers safe-haven flows. At the time of writing, XAG/USD is trading around $93.90, holding below the all-time high near $95.89 set on Tuesday.
Markets drew some relief after US President Donald Trump backed away from his threat to impose fresh tariffs on several European countries. In a Truth Social post late Wednesday, Trump said the tariffs scheduled for February 1 would not go ahead after a “very productive meeting” with NATO Secretary General Mark Rutte, adding that a framework agreement on Greenland and the Arctic region had been reached.
Despite the easing of immediate trade-war fears, underlying fundamentals remain supportive of further upside. Silver continues to benefit from its dual role as both an investment and an industrial metal, with tight physical supply conditions adding another layer of support.
From a technical perspective, XAG/USD is up around 32% so far this month, underscoring the strength of the broader uptrend.
On the 4-hour chart, Silver remains within a well-defined rising structure and is currently testing the 21-period Simple Moving Average (SMA), which is capping immediate upside attempts. The 50-period SMA, near 91.20, marks a deeper support zone and continues to slope higher.
On the downside, a decisive break below the 50-period SMA and the $90.00 psychological level would weaken the bullish structure and likely invite stronger selling interest, exposing the 85.00-86.00 region as the next support. A sustained move below that zone would open the door for a deeper corrective phase toward the 80.00 handle.
On the upside, bulls remain focused on a break above the $95.00 mark. A sustained push beyond that level would bring the $100.00 psychological level into focus.
The Relative Strength Index (RSI) is hovering near 54, easing from overbought territory and signaling cooling momentum while still holding in positive territory. Meanwhile, the Moving Average Convergence Divergence (MACD) remains above the zero line but is flattening, suggesting bullish momentum is slowing and favoring near-term consolidation.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- Annual core PCE inflation in the US edged higher to 2.8% in November.
- USD Index stays under bearish pressure and declines toward 98.50.
Annual inflation in the United States, as measured by the change in the Personal Consumption Expenditures (PCE) Price Index, rose to 2.8% in November from 2.7% in October, the US Bureau of Economic Analysis reported on Thursday. On a monthly basis, the PCE Price Index rose by 0.2%.
The core PCE Price Index, the Federal Reserve's (Fed) preferred gauge of inflation, rose by 2.8% in November, following the 2.7% increase recorded in October and matching the market expectation.
Other details of the publication showed that Personal Income rose by 0.3% on a monthly basis in November, while Personal Spending increased by 0.5%.
Market reaction to US PCE inflation data
The US Dollar (USD) stays under modest bearish pressure following these data. At the time of press, the USD Index was down 0.25% on the day at 98.55.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
The Japanese Yen (JPY) is soft, down 0.2% vs. the US Dollar (USD) and an underperformer against all of the G10 currencies as we head into Thursday’s NA session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
USD/JPY back above 158, near intervention levels
"Trade data disappointed, and the yen is once again trading defensively, with USD/JPY drifting back above 158 and toward last week’s highs above 159. Both levels are important and are associated with recent verbal interventions from the MoF as they sought to push back on sentiment-driven weakness related to politics. "
"The rumors and ultimate confirmation of an election, scheduled for February 8, have generated weakness in the yen as market participants have considered the implications of a strengthened mandate for PM Takaichi within the context of her views on central bank independence and calls for closer cooperation with government."
"The BoJ’s next policy decision should be announced early in Friday’s Asian trading session. A hold is widely anticipated and the tone will be critical, given recent turbulence in the Japanese government bond market."
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