The British Pound advanced against the U.S. Dollar in early European trading on Tuesday, with GBP/USD climbing toward the 1.3195 level. The uptick in Sterling comes amid renewed optimism over U.S.-UK trade relations and supportive signals from the Bank of England (BoE).
Gains in the Pound followed last week’s positive developments in trade talks between Washington and London. U.S. President Donald Trump announced a partial rollback of tariffs, reducing duties on British cars, steel, and aluminium while maintaining a new 10% tariff on most other UK imports. The move marked a shift toward improved trade ties and bolstered sentiment around the Pound.
Sterling also found support from the Bank of England’s measured policy approach. Last week, the BoE cut interest rates by 25 basis points in a split vote but emphasized its intention to ease policy gradually. The central bank downplayed global trade tensions, including the effects of President Trump’s broader tariff regime, and revised its UK growth forecast upward to 1% for 2025, compared to 0.75% in its February projection.
Traders are now focused on upcoming key economic data that could influence near-term direction for the pair. The UK’s latest employment report and the U.S. Consumer Price Index (CPI) for April are both scheduled for release later on Tuesday. The U.S. CPI reading will be closely watched for signals on the Federal Reserve’s next move. A stronger-than-expected inflation print could prompt renewed speculation of Fed tightening, potentially reversing some of the Greenback’s recent losses.
For now, GBP/USD maintains its bullish momentum, supported by trade optimism and a steady policy path from the BoE. However, upcoming data releases could inject fresh volatility into the pair as investors recalibrate expectations around central bank actions on both sides of the Atlantic.
Related Topics:
