The GBP/USD currency pair will remain under the influence of geopolitics and politics in the new week. Essentially, we've been saying the same thing every day for the past four months: all movements in the foreign exchange market are directly tied to Donald Trump's actions, decisions, and plans. It's only been four months since Trump became president, and look at how many global events have occurred! It's not just about the trade war that Trump has unleashed against China and 74 other countries. One can also point to the Republican's inability to resolve the conflict between Ukraine and Russia, even though he, as a U.S. presidential candidate, had promised to do so "within 24 hours." Trump likely believed that his authority gave him enough leverage over Vladimir Putin and Volodymyr Zelensky to convince them to end the conflict. In practice, however, he had no influence on the two presidents of the warring nations. So, Trump turned to his favorite tool—threats. He said that if Kyiv refused to engage in peace talks, he would freeze all aid to Ukraine. If Russia refused peace, he would impose a new sanctions package on Moscow and introduce a 500% tariff on all countries importing energy resources from Russia. As one might expect, these measures also failed to produce significant results. There's also the "One big, beautiful bill" that Trump is eager to pass. Almost all experts have called this bill "disastrous" for the U.S. economy, as it entails cutting support for the poor and vulnerable segments of the population while lowering taxes... mainly for the wealthy and well-off. Trump has also proposed making tips tax-exempt. Many experts, including Elon Musk, have stated that this new law would increase the U.S. national debt by another 3 trillion dollars. Let us recall that Trump had promised to reduce the national debt. And the conflict between Iran and Israel, which has taken on new dimensions under Trump, is the cherry on top. The leader of the Republican Party, who promised to end many wars and styled himself as a peacemaker deserving of a Nobel Prize, has effectively admitted that the White House is behind the attacks on Iran, which refuses to abandon uranium enrichment and nuclear weapons development. Trump is now giving Iran a chance to resume negotiations, but it's clear that Tehran will not abandon its long-standing policy (which has remained unchanged for decades despite sweeping sanctions) just because Washington wants it to. Thus, it seems a new war in the Middle East involving the U.S. is on the horizon.
Analysis are provided by InstaForex.
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