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UK’s Starmer advocates for a US-UK economic partnership to sidestep 10% export tariffs.
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Trump suggests tariffs serve as leverage for future trade deals, while Bessent confirms ongoing negotiations, boosting market optimism.
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Traders eye upcoming UK GDP figures and Fed meeting minutes; persistent US inflation may strengthen the dollar and pressure the British Pound.
The Pound Sterling gained ground against the US Dollar on Tuesday, rising 0.34% to 1.2756 after rebounding from intraday lows near 1.2700. The recovery was supported by growing optimism that tariffs could be used as leverage for trade negotiations, following US President Donald Trump’s comments that many countries are seeking new deals with the US.
US Treasury Secretary Scott Bessent added to the upbeat tone, expressing confidence that agreements would be reached, which improved global risk appetite and weighed slightly on the Greenback. Meanwhile, UK Prime Minister Keir Starmer voiced hopes for an economic partnership with the US to bypass the 10% tariffs imposed on British exports.
In the UK, the economic calendar remains light until the release of February’s GDP figures later this week. Market participants anticipate a 25 basis-point rate cut by the Bank of England (BoE) in May, with up to 75 basis points of easing projected by the end of 2025.
In the US, attention turns to trade headlines and the upcoming release of the Federal Reserve’s meeting minutes. Traders are also focused on CPI and PPI inflation reports, which are expected to show a gradual decline. However, any upside surprise could boost the US Dollar by renewing inflation concerns.
Technical Outlook – GBP/USD
GBP/USD is likely to trade sideways in the near term as markets await key data from both sides.
The pair is currently holding between the 50-day Simple Moving Average (SMA) at 1.2736 and the 200-day SMA at 1.2811.
On the downside, key support lies at 1.2700, followed by the 100-day SMA at 1.2628. On the upside, a break above 1.2811 could open the door for a move toward 1.2900.
