The British Pound came under intense pressure on Friday, with the GBP/USD pair plunging to 1.2850, its lowest level in nearly a month. The decline reflects a growing appetite for the U.S. Dollar (USD) as risk-off sentiment spreads across financial markets ahead of key U.S. macroeconomic events.
On the technical front, the Relative Strength Index (RSI) on the 4-hour chart dropped below the neutral 50 mark, signaling further downside risk. Key support levels now sit at 1.2960, followed by 1.2935—the lower boundary of the recent ascending channel—and 1.2900, a psychologically significant round level.
Just a day earlier, GBP/USD briefly broke above 1.3200 for the first time since early October, but the rally lacked follow-through. Broad risk aversion returned to the market on Friday, pressuring both equity indices and high-beta currencies.
Risk-Off Mood Boosts the Dollar
A stronger U.S. Dollar has emerged as the dominant theme in global markets, fueled by a combination of macro uncertainty and central bank expectations. Renewed fears over global trade, triggered by tariff-related tensions, have investors seeking safety.
- FTSE 100 dropped 1.5% intraday
- U.S. futures slipped between 0.3% and 0.9%
- Market odds of a Fed rate cut in May currently stand at 32% (CME FedWatch)
The Pound’s weakness also comes as traders reassess the UK’s economic resilience in the face of softer global demand and persistent inflation concerns. While sterling had shown strength on Thursday, its gains were largely due to a temporarily weaker USD.
All Eyes on NFP and Powell
Attention now shifts to upcoming U.S. Nonfarm Payrolls (NFP) data and Fed Chair Jerome Powell’s scheduled remarks. Market consensus expects a jobs gain of 135,000 for March. A softer print below 100,000 could drag the USD lower, potentially offering near-term support for GBP/USD. However, a robust print of 160,000 or higher may accelerate downside momentum in the pair.
Powell is also set to speak at the Society for Advancing Business Editing and Writing Conference. His comments on growth risks, inflation trends, and the path of monetary policy could provide fresh directional cues.
Should Powell emphasize downside growth risks or signal caution over the tariff regime, the USD could weaken, allowing GBP/USD to stabilize. Conversely, if he reinforces inflation vigilance and downplays immediate easing, the greenback could extend gains.