The British Pound faced resistance at 1.3475 during early London trading on Friday, pulling back to the 1.3450 support level. The pair has turned bearish on the daily chart following a downward revision in the UK’s S&P Global Manufacturing PMI, though it holds above the psychological 1.3400 handle within its weekly range.
PMI Revision Details Friday’s data showed the UK manufacturing sector expanding more slowly than anticipated. The final December reading was adjusted down to 50.6 from the preliminary 51.2. Despite the miss, the sector remains in expansion territory (above 50.0) and shows improvement over November’s 50.2 reading.
Broader Market Context While the pair has corrected from recent highs near 1.3530, the longer-term trend remains positive, having gained over 7% throughout 2025. The US Dollar continues to struggle due to a combination of President Trump’s volatile trade policies, signs of a cooling US economy, and political pressure for rate cuts.
Central Bank Divergence Looking ahead, the monetary policies of the BoE and the Fed appear to be decoupling. Although the Bank of England cut rates in December via a split vote, persistent inflation makes further near-term easing unlikely. Conversely, the Federal Reserve is expected to cut rates further in 2026, a dovish stance that could intensify if President Trump replaces Jerome Powell with a more compliant Chairman.
