The British pound hovered near 1.3300 against the US dollar on Monday, supported by sustained optimism around the UK economy and improving global risk sentiment. Despite recent fluctuations in broader markets, the bullish tone surrounding GBP/USD has remained intact as investors stay cautiously optimistic.
Traders have continued to favor the pound amid solid domestic data and expectations that the Bank of England may maintain a steady policy stance in the near term. The currency has shown resilience in the face of external pressures, benefiting from a relatively stable outlook compared to other major economies.
GBP/USD 1-D Chart as of May 5th, 2025 (Source: TradingView)
Market participants are also responding to signs that inflation in the UK is easing at a manageable pace, which could give the central bank room to avoid further tightening without appearing dovish. “The pound is holding its ground as long as growth remains steady and inflation continues to cool gradually,” noted one FX analyst.
Meanwhile, the US dollar has shown signs of consolidation, following a rally earlier in the month driven by stronger-than-expected economic figures. With traders awaiting the next round of US inflation and labor data, short-term moves in GBP/USD are likely to reflect shifting rate expectations on both sides of the Atlantic.
Risk sentiment also played a role in keeping sterling supported, as global equity markets stabilized and investors rotated back into higher-beta currencies. The pound, often seen as a proxy for broader risk trends, has tracked gains in global stocks and commodities.
Looking ahead, traders will be watching for upcoming UK employment data and any fresh guidance from the Bank of England. For now, GBP/USD appears comfortable near 1.3300, with the path forward likely shaped by how each central bank navigates the balance between inflation control and economic stability.
