GBP/USD Hits 45-Month High as US Dollar Decline Accelerates

GBP/USD Hits 45-Month High as US Dollar Decline Accelerates

The GBP/USD currency pair reached a 45-month high on Tuesday, as the US Dollar faced continued pressure from multiple fronts. The Pound Sterling advanced amid broader Greenback weakness, driven by market unease over U.S. fiscal policies and escalating trade tensions.

Trump’s Trade Threats Shake Currency Markets

Investors reacted strongly to new trade war threats from former President Donald Trump, who suggested that Japan could face 30–35% tariffs on goods shipped to the United States. The uncertainty caused by these threats is weighing heavily on the Dollar, fueling capital flows into alternative currencies like the British Pound.

Trump also reaffirmed that suspended tariffs from April would resume on July 9, as part of his "reciprocal tariff package," further unsettling financial markets.

US Budget Concerns Add to Dollar Pressure

Meanwhile, the US Senate passed Trump’s expansive budget bill, which now heads to the House of Representatives. The bill could add trillions to the national debt over the next decade—raising investor concerns about the long-term sustainability of US fiscal policy.

Though Trump campaigned on reducing the federal deficit, the new spending plan paints a different picture, contributing to the decline of confidence in the Dollar.

NFP Data Ahead of US Holiday

Looking ahead, traders are closely watching the early release of the US Nonfarm Payrolls (NFP) report on Thursday, ahead of Friday’s market closure for a U.S. national holiday. This data could further influence the direction of GBP/USD in the short term.

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