**Forex Markets React to Political and Economic Turbulence: FTSE 100, GBP/USD, Trump Tariffs, and PMI Data in Focus**
By Bloomberg News (Original reporting by the Bloomberg Markets Team)
Credit: [Bloomberg Markets Live Blog, August 6, 2025](https://www.bloomberg.com/news/live-blog/2025-08-06/ftse-100-live-trump-tariffs-pmi-data-gbp-usd-rachel-reeves-glencore-what-s-moving-uk-markets-right-now-markets-today)
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The global foreign exchange market remains heavily influenced by a confluence of political events, shifting economic data, and unexpected market movements. As highlighted in Bloomberg’s August 6, 2025, Markets Live Blog, traders, investors, and policymakers are grappling with volatility in the pound sterling, fluctuating equity indices like the FTSE 100, and new rounds of US tariffs under former President Trump. Meanwhile, updated Purchasing Managers’ Index (PMI) data and policy commentary from key government officials only adds complexity to trading dynamics.
This article presents an in-depth analysis of the day’s key events in Forex, alongside a breakdown of how these factors are influencing GBP/USD and broader market sentiment.
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## Key Drivers in Forex Markets Today
### 1. US Tariffs Return to Center Stage
Former President Donald Trump’s anticipated imposition of new tariffs has reignited volatility in global currency and commodity markets. The implications are significant for major trading currencies, particularly those of the United Kingdom, Europe, and China.
**Key Points:**
– **Details of Tariff Plan:** The new round of US tariffs targets a broad swathe of imports, with an explicit focus on Chinese manufactured goods and certain European products.
– **Market Reaction:** The US dollar initially saw upward pressure given its traditional status as a safe-haven asset. Conversely, currencies closely tied to export economies, such as the British pound and euro, faced selling pressure amid fears of softer global demand.
– **Volatility Patterns:** Short-term bursts of volatility led to sharp intra-day moves in GBP/USD, EUR/USD, and USD/CNH (Chinese yuan offshore).
**Market Implications:**
– Investors often shift portfolios in anticipation of broader trade wars, typically moving out of risk-sensitive assets and into the dollar or yen.
– Emerging markets currencies are especially vulnerable as higher tariffs slow global growth and drive risk aversion.
### 2. GBP/USD: Pound Sterling’s Tumultuous Session
The pound sterling fluctuated sharply against the US dollar amid a combination of headline news and economic signals.
**Major Factors Affecting GBP/USD:**
– **Tariff-Induced Weakness:** The pound started the session weaker, reflecting broad-based aversion to risk and concerns about UK trade exposure following the new US tariffs.
– **Economic Data Releases:** UK Services PMI, a key barometer of economic health, printed slightly above consensus at 53.6, increasing hopes the UK could be more resilient than previously thought.
– **Political Commentary:** Statements from UK Chancellor Rachel Reeves aimed to shore up confidence, emphasizing government resolve to support businesses while also hinting at potential fiscal intervention.
**Intra-day Developments:**
– GBP/USD traded within a wide range, dropping below 1.26 after the US tariffs announcement before recovering some ground as UK data surprised on the upside.
– The pair remains susceptible to further headline risk, particularly if the US or EU escalates the trade dispute.
**Key Metrics:**
– **PMI Result:** 53.6 (above 50 signals expansion, with consensus at 53.2)
– **Session Low:** 1.2578
– **Session High:** 1.2665
### 3. PMI Data Moves Markets
PMI data releases across the UK and Eurozone offer critical insight into business conditions and future growth.
**The Importance of PMI:**
– PMI gauges manufacturing
Read more on GBP/USD trading.