British PMIs slip, Trump says won't fire Powell

The British pound dropped as much as 0.7% earlier today and is under pressure. In the North American session, GBP/USD is trading at 1.3265, down 0.45% on the day.

The pound has taken advantage of broad US dollar weakness recently, rising 3% in the month of April. On Tuesday, the pound climbed as high as 1.3423, its highest level since September 2024.

UK PMIs fall into contraction territory

UK PMIs reports softened in April, another reminder that that the UK economy is struggling. The Services PMI fell to 48.9 from 52.5 in March, below the market estimate of 51.3. There are growing fears that the UK will fall into recession and global economic uncertainty has led to decreased business activity.

The Manufacturing PMI eased to 44.0, matching the market estimate but lower than the March reading of 44.9. This was the lowest reading since August 2023 as the deteriorating global market outook has reduced demand for UK exports. The increase in employer tax contributions has hurt employment and lowered confidence.

The International Monetary Fund has lowered its 2025 global growth forecast to 2.8, down from 3.3% in January. The downgrade was in response to US tariffs and the IMF warned that an escalation of trade tensions between the US and other countries would create further market volatility and lead to even lower growth.

Markets surge as Trump lowers rhetoric against Powell, China

US stock markets are sharply higher on Wednesday after President Trump said that he had no intention to fire Federal Reserve Chair Jerome Powell. Trump had intensified his attacks on Powell in recent days, resulting in sharp slides in US equity markets and the US dollar.

Trump also said that China tariffs would drop "substantially" and investors hope this signals a de-escalation in the nasty trade war between the US and China.

• GBP/USD has pushed below support at 1.3298 and is testing support at 1.3263
• There is resistance at 1.3360 and 1.3395