Pound Sterling Powers to Fresh Multi-month Best

Economic

Summary:

British Pound Gains against the Dollar, but losses against the Euro mount.

The British pound struck its highest level in seven months against the Dollar amidst renewed fears for the independence of the U.S. Federal Reserve after President Donald Trump launched a fresh attack on Chair Jerome Powell.

Stocks and the Dollar fell after investors feared Trump's latest comments would erode the Fed's independence and, in doing so, undermine faith in U.S. financial markets.

"'Preemptive Cuts' in interest rates are being called for by many. With energy costs way down, food prices (including Biden’s egg disaster!) substantially lower, and most other 'things' trending down, there is virtually no inflation," said Trump on Truth Social.

"With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW. Europe has already 'lowered' seven times. Powell has always been 'To Late,' except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?" he added.

Stock markets fell following the communication: the S&P 500 closed down 2.38% at 5,158.20, while the technology-heavy Nasdaq fell 2.5% to 15,870.90, while the Dow Jones industrial average slid 2.48% to 38,170.41.

"The US dollar index declined to its weakest level since 2022 after President Donald Trump’s criticism of Federal Reserve Chair Jerome Powell contributed to fears over the independence of the central bank," says Mark Haefele, Global Wealth Management Chief Investment Officer at UBS AG.

The Pound-to-Dollar exchange rate rose to 1.2423, a level last seen in September 2024. A succession of 12 daily gains also marks the longest winning streak since 1971, when Sterling switched to the decimal system.

GBP/EUR Struggles

Falling equity markets confirm a 'risk off' sentiment exists in global markets, which traditionally prompts GBP weakness against the JPY, CHF, USD and EUR.

With the cause of the market's worries emanating from the U.S., the USD is not a participant in 'safe haven' flows. However, the EUR is pressuring the Pound-to-Euro exchange rate.

GBP/EUR is trading at 1.1620, having fallen 2.65% already this month.

"When sentiment is positive, sterling appreciates; in negative global conditions, it becomes vulnerable," says George Vessey, Lead FX Strategist at Convera.

Fed Will Behave Differently

Investors fear the central bank's independence from political influence risks being undermined, which dents faith in the U.S. economy and financial markets.

Last Thursday Trump said the "termination" of Jerome Powell as Federal Reserve chairman "cannot come fast enough".

The attacks on the Fed add another prong to 2025's 'sell-America' trade, which quickly replaced the "U.S. exceptionalism" trade of 2024, which coincided with fresh multi-year highs in the Dollar.

"The consensus was pricing U.S. exceptionalism through non-inflationary tax cuts financed by government efficiency and deregulation, which would have been USD positive. So far, we see a policy mix closer to a stagflationary scenario, with government spending cuts and high tariffs, which has been USD negative," says Athanasios Vamvakidis, FX Strategist at Bank of America.

Trump cannot remove Powell, but concerns reach markets via two channels:

1) The Fed's Committee members are not immune to pressure and might shift behaviour (i.e. cut when previously they would have preferred to hold).2) Powell's term ends in May 2026, and it is clear Trump would appoint a 'dove' who has his ear.

This suggests forward-looking markets are also factoring in a far 'looser' monetary policy dictated by the Oval Office from 2026.

Lower rates would, in theory, lower borrowing costs, pressure bond yields and lead to USD weakness.

Trump Irked by Powell's Comments

"Our obligation is to keep longer-term inflation expectations well-anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem," Jerome Powell said in Chicago last week.

Following the comments, Trump told reporters in the White House:

"If I want him out, he'll be out of there real fast, believe me... I'm not happy with him."

In 2024, the Fed completed an interest rate raising cycle that took the benchmark lending rate to a multi-decade high of between 5.25% and 5.5%.

The Fed has since started lowering interest rates, which are now 4.25% to 4.5%, a whole point lower than where they were a year ago.

However, a resurgence in inflation means the Fed has had to halt the cutting process, which means borrowing costs have stopped falling.

Should inflation continue to rise, rates will be held for longer, leading to a slowdown in the economy.

The Fed’s next board meeting is on 6 and 7 May and Trump is likely to pressure the Fed ahead of it, but it is unlikely that officials will budge.

Source: Poundsterlinglive

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Golden Gleam

Commodity

Technical Analysis

Amid the FOMC member’s speech, today’s outlook for XAUUSD remains bullish, with technical analysis suggesting continued upward momentum after a minor correction. An upcoming speech by a FOMC member may boost XAUUSD quotes further to 3,555 USD. Discover more in our analysis for 22 April 2025.

Fundamental analysis

XAUUSD forecast for 22 April 2025 takes into account today’s speech by Federal Reserve Bank of Philadelphia President and FOMC member Patrick Harker. His comments could provide new insight into the Fed’s further actions.

Harker is known for his moderately hawkish stance, especially during periods of inflationary pressure. Markets will be listening closely for:

●Signals of a policy shift – either a pause or further rate hikes

●Updated views on inflation and the labour market – key Fed decision drivers

●Broader economic risks, including geopolitical tensions and growth slowdown

With the US dollar weakening against Gold, XAUUSD prices are gradually maintaining their upward momentum, reaching new all-time highs.

XAUUSD technical analysis

On the H4 chart, XAUUSD prices have formed a Hammer reversal pattern near the middle Bollinger band. The price is now building a bullish wave in response to that signal. The uptrend will likely continue as XAUUSD quotes have broken above the ascending channel. The immediate upside target could be the 3,555 USD resistance level.

However, XAUUSD technical analysis for today also suggests another scenario, with the price correcting towards 3,435 USD before resuming growth.

Following the correction, XAUUSD prices could set another price record and head towards 3,700 USD in the near term.

Source: RoboForex

Risk Warnings and Disclaimers

Add to Favorites

Michelle

Economic

Forex

Britain is more likely to see lower rather than higher inflation as a result of U.S. President Donald Trump's tariffs, Bank of England policymaker Megan Greene said on Tuesday.

Greene, who has sounded more worried about the persistence of inflation pressure than some of her other colleagues on the Monetary Policy Committee, said Britain's decision not to levy reciprocal tariffs meant it was likely to become a destination for cheaper goods from Asia and the European Union.

"The tariffs actually represent more of a disinflationary risk than an inflationary risk," Greene told Bloomberg TV.

However, she said she remained concerned about domestic inflation pressures in Britain due to a lack of supply capacity, which informed the "cautious" approach to rate cuts she has taken so far.

The BoE's next interest rate announcement comes on May 8. Financial markets on Tuesday priced in a 100% chance of a rate cut, with recession fears rising sharply in the wake of Trump's imposition of tariffs.

Asked about investors' worries over the independence of the U.S. Federal Reserve after Trump criticised its chair Jerome Powell, Greene said: "Credibility is the currency of central banks and I think independence is quite an important piece of that."

Source: TradingView

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

Stocks

Asian shares were trading mixed Tuesday amid global skepticism about U.S. investments and President Donald Trump’s trade war.

Trading was cautious in Asia, where the benchmark Nikkei 225 lost 0.2% in afternoon trading to 34,224.33. Australia’s S&P/ASX 200 was virtually unchanged, inching down less than 0.1% to 7,816.70. South Korea’s Kospi lost 0.2% to 2,483.60. Hong Kong’s Hang Seng added nearly 0.6% to 21,513.91, while the Shanghai Composite added 0.4% to 3,303.32.

Trump’s tariffs and the retaliatory measures from China hang as a shadow over the region.

“Across Asia, there is undoubtedly a sense of urgency to get to the negotiation table even as striking a deal at an appropriate cost can be tough,” said Tan Boon Heng, at Mizuho Bank’s Asia & Oceania Treasury Department.

“China’s warning to countries not to resolve U.S. tariffs by striking deals at the expense of Beijing’s interests reveals the geo-economic polarization.”

On Wall Street the previous day, the S&P 500 sank 2.4% in another wipeout. That yanked the index that’s at the center of many 401(k) accounts 16% below a record set two months ago.

The Dow Jones Industrial Average dropped 971 points, or 2.5%, while losses for Tesla and Nvidia helped drag the Nasdaq composite down 2.6%.

U.S. government bonds and the value of the U.S. dollar also sank as prices retreated across U.S. markets. That’s an unusual and worrying move because Treasurys and the dollar have historically strengthened during episodes of nervousness.

This time around, though, it’s policies directly from Washington that are causing the fear and potentially weakening their reputations as some of the world’s safest investments.

In energy trading, benchmark U.S. crude gained 45 cents to $63.53 a barrel. Brent crude, the international standard, rose 45 cents to $66.71 a barrel.

In currency trading, the U.S. dollar edged down to 140.31 Japanese yen from 140.80 yen. The euro cost $1.1508, down from $1.1514.

Source: AP

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Blue River

Technical Analysis

The USD/JPY pair dropped to 140.13 on Tuesday, marking yet another seven-month low.

Key Drivers Behind USD/JPY Movements

The yen’s rally is gaining momentum amid rising global trade risks. Additionally, investors are growing increasingly wary of US assets.

Last week’s tentative market optimism has now faded, with sentiment deteriorating following remarks from US President Donald Trump regarding the potential dismissal of Federal Reserve Chair Jerome Powell. Trump has expressed dissatisfaction with the Fed’s pace of decision-making, with the White House believing progress is too slow.

Domestically, Japanese investors are closely watching the upcoming Bank of Japan (BoJ) meeting on 1 May. While the key interest rate is expected to remain steady at 0.50% per annum, the central bank may revise its economic growth forecasts—prompted by mounting external risks, including the impact of US tariffs on Japanese exports.

The yen continues to perform strongly as a safe-haven asset. However, an excessively strong JPY also carries risks.

Technical Analysis: USD/JPY

H4 Chart

On the H4 chart, USD/JPY has broken below the 141.55 level, extending its downward wave towards 138.88. This is a near-term target, and upon reaching it, a corrective rebound towards 143.55 is possible. Beyond that, further downside towards 136.22 may be considered. This scenario is supported by the MACD indicator, with its signal line firmly below zero and pointing sharply downward.

H1 Chart

On the H1 chart, the pair continues to develop the third wave of its downtrend. The immediate target of 140.00 has been met, and a temporary rebound to 141.55 (testing from below) could occur today. Subsequently, another decline towards 138.88 may follow. This outlook is corroborated by the Stochastic oscillator, whose signal line is below 20 but turning upward towards 80.

Conclusion

While the yen’s strength reflects its defensive appeal, excessive appreciation could prove detrimental. Traders should monitor both fundamental developments and technical signals for further guidance.

Source: ACTIONFOREX

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

European shares opened lower on Tuesday and gold hit $3,500 for the first time amid concerns over the US Federal Reserve’s independence after attacks on its boss Jerome Powell by President Donald Trump and the lack of progress on tariff negotiations by Washington.

The pan-regional Stoxx 600 index was down 0.51% in early deals at 503 points. Germany’s DAX was 0.34% lower, while Britain’s FTSE 100 bucked the trend to edge ahead 0.08%.

US indices closed sharply lower on Monday as traders returned from the Easter long-weekend break to an escalation in tensions between the White House and Fed chairman Jerome Powell over interest rate cuts, with an enraged Trump calling the central bank chief - whom he appointed - a "loser".

At the close, the Dow Jones Industrial Average was down 2.48% at 38,170.41, while the S&P 500 lost 2.36% to 5,158.20 and the Nasdaq Composite saw out the session 2.55% weaker at 15,870.90. Jittery investors took flight from US assets as bonds and the dollar both took a hit, while gold - seen as a safe haven - hit fresh records.

"The tariff tug-of-war still has no end in sight, and now the Powell power struggle is adding more fuel to the fire, with whispers from the White House about his potential ousting rattling already jittery investors. At this rate, even bad news might be seen as a buying signal - if only because something, anything, from Washington might offer a sliver of direction," said Hargreaves Lansdown analyst Matt Britzman.

"Markets are now itching for real progress on trade deals - posts from the President on Truth Social or X just aren’t cutting the mustard anymore. Investors want ink on paper, not just words, as a clear signal that movement is happening - and the clock is ticking."

"Gold dazzled past $3,480 per ounce, hitting a record high as fears over trade tensions and political meddling in US monetary policy sent risk appetite packing. Not to be outdone, the yen hit a seven-month high against the dollar, with investors saying yes to safety while turning their backs on shaky sentiment in US assets."

Over the Easter break, Powell said that with elevated uncertainty surrounding the impact of President Trump's recently implemented tariffs on the US economy, he now expects to see inflation rise and growth slow.

Powell said Trump's tariffs were "likely to move us further away" from its goals for "the balance of this year", while Chicago Fed head Austan Goolsbee cautioned that the tariffs will potentially cause the US economy to "fall off" by the summer.

In response, Trump said Powell's termination "can't come fast enough", with White House economic advisor Kevin Hassett stating the administration was currently looking into just that, leading to fresh questions around the central bank's independence.

Trump later demanded that Powell, who he called "Mr Too Late and "a major loser", lower interest rates "NOW".

In equity news, Novo Nordisk shares slumped on news that an experimental pill made by US rival Eli Lily worked as well as the Danish drugmaker's blockbuster drug Ozempic to lower weight and blood sugar in a trial of diabetes patients.

Source: Sharecast

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Blue River

Forex

Technical Analysis

Increased pressure on the Fed and rising geopolitical tensions continue to undermine the US dollar, supporting the EURUSD rally. The EURUSD technical analysis points to strong upside potential, with the next target at 1.1630.

The EURUSD rate is gaining for the third consecutive trading session, currently trading at 1.1530. Find out more in our analysis for 22 April 2025.

EURUSD forecast: key trading points

● President Donald Trump intensifies criticism of Fed Chairman Jerome Powell

● Traders are concerned about growing tension between the White House and the Federal Reserve

● EURUSD forecast for 22 April 2025: 1.1630

Fundamental analysis

The EURUSD rate continues to rally after rebounding from the 1.1475 support level. Pressure on the US dollar has increased following fresh verbal attacks by President Donald Trump on Federal Reserve Chairman Jerome Powell. On Monday, Trump escalated his calls for immediate rate cuts.

Market participants are increasingly concerned about the rising tension between the White House and the Fed. Trump’s actions could be perceived as an attempt to pressure the Fed’s independence, with speculation around a possible replacement of Powell adding to uncertainty and fear in the market, undermining confidence in the US dollar.

Additional support for the EURUSD rally came from investor disappointment over stalled US-China trade negotiations. Beijing accused Washington of misusing tariffs and warned other nations about entering trade deals with the US, which has increased tensions and further weighed on the US dollar.

EURUSD technical analysis

The EURUSD rate is on the rise after breaking above the upper boundary of the descending corrective channel. Today’s EURUSD forecast points to a continued bullish wave targeting 1.1630. Technical indicators support the bullish scenario, with Moving Averages maintaining their upward direction and the Stochastic Oscillator rising confidently from oversold territory, showing a bullish crossover between the %K and %D lines. Consolidation above the local resistance at 1.1555 will confirm the bullish scenario.