British Pound/US Dollar: Impact of Tariff Uncertainty and Recent Market Developments
Exchange Rate Position
- The British Pound has strengthened against the US Dollar, rising to 1.3533 on 21 Feb 2026, its highest level since 26 Jan 2026 when it reached 1.3849.
- The 52‑week low remains at 1.25751 (27 Feb 2025).
Drivers of Recent Currency Movement
| Driver | Source | Key Point |
|---|---|---|
| Supreme Court ruling on Trump‑era tariffs | www.fxstreet.de.com (17:07 BST) | The U.S. Supreme Court invalidated the tariffs imposed under the International Emergency Economic Powers Act (IEEPA). This decision reduced uncertainty around U.S. trade policy, supporting the pound. |
| Market reaction to tariff uncertainty | www.investinglive.com (10:15 BST) | The USD weakened after the Court’s ruling, with traders noting that tariff uncertainty still weighs on the dollar. |
| European market sentiment | www.finanznachrichten.de (15:15 BST & 14:21 BST) | Ongoing tariff uncertainty has dampened sentiment on Wall Street, but the FTSE 100 remains in the green despite renewed concerns. |
| Regional trading considerations | www.diariolasamericas.com (20:42 BST) | Optimal trading windows in Latin America are highlighted; aligning with London sessions can enhance profitability. |
Market Sentiment and Index Performance
- U.S. markets opened lower on 23 Feb 2026, reflecting caution amid tariff uncertainty.
- European indices such as the FTSE 100 and broader European markets traded modestly, with some losses but overall positive overnight trading.
- Asian sessions were not covered in the provided news, so no specific impact was noted.
Forecast Implications for GBP/USD
- The weakening of the USD, following the Supreme Court’s invalidation of the tariffs, has lifted the GBP/USD pair.
- Analysts anticipate that continued tariff uncertainty may sustain a favorable environment for the pound, but any reversal in U.S. policy could reverse gains.
- Short‑term trading opportunities may arise during the overlap of London and New York sessions, particularly given the highlighted optimal trading times in Latin America.
Conclusion
Tariff uncertainty, amplified by recent Supreme Court actions, has created a favorable backdrop for the British Pound against the US Dollar. The pair’s recent gains align with a broader trend of USD weakness amid trade policy ambiguity. Market participants should monitor further developments in U.S. trade policy and tariff negotiations, as these are likely to continue influencing the GBP/USD trajectory in the coming weeks.
