- Hassett reveals Trump is exploring legal options to remove Powell, reigniting concerns over the Fed’s political independence.
- DXY drops 1.09% to March 2022 lows as equities slump and investors flee the Greenback.
- CB Leading Index falls more than expected; US economic signals weaken amid rising trade and policy uncertainty.
The Pound Sterling (GBP) rallies sharply by over 0.70% on Monday as investors grew distrustful of United States (US) policymakers after White House Economic Adviser Kevin Hassett stated that President Donald Trump is seeking ways to sack Federal Reserve (Fed) Chair Jerome Powell. Consequently, traders penalize the Greenback, pushing GBP/USD close to the 1.3400 figure.
Pound rallies toward 1.34 as Trump eyes Powell firing, US Dollar crashes on Fed independence fears
The market mood turned sour as Washington threatened the Fed’s independence again. US equities are sinking, while the US Dollar Index (DXY), which reflects the buck’s value against a basket of six currencies including Cable, plummets over 1.09% to 98.31, levels last seen in March 2022.
Chicago Fed President Austan Goolsbee said he hopes the US does not move to an environment where the central bank’s ability to set monetary policy independently of political pressure is questioned.
A scarce economic calendar witnessed the release of the US Conference Board (CB) Leading Index for March which declined -0.7% below forecasts of -0.5% to 100.5. Justyna Zabinska-LaMonica, Senior Manager, Business Cycle Indicators at The Conference Board, said, “The US LEI for March pointed to slowing economic activity ahead.” She added that the decline could be attributed to “soaring economic uncertainty ahead of pending tariff announcements.”
Across the pond, the UK economic docket is light, yet traders are eyeing the release of S&P Flash PMI final readings on April 23. In the US, Fed speakers would grab the headlines, and traders would eye S&P Flash PMIs.
GBP/USD Price Forecast: Technical outlook
GBP/USD uptrend remains intact, with investors eyeing a daily close above the September 26 high of 1.3434, which could set the stage to challenge 1.3450 ahead of buyers driving the exchange rate towards 1.35. It should be said that the Relative Strength Index (RSI) has turned overbought, but the slope has broken the last peak, an indication of buying pressure building.
Conversely, sellers need GBP/USD to remain below 1.3400 to remain hopeful of pulling the exchange rate below 1,3300, which is crucial to pave the way for a pullback. In that outcome, the next support would be April 18 low at 1.3248, followed by the 1.32 mark.
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