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The Pound Sterling staged a modest comeback against the US Dollar on Tuesday, April 8, 2025, climbing 0.34% to trade at 1.2756. This recovery follows a dip to daily lows near 1.2700, fueled by renewed optimism that tariffs might pave the way for fresh trade deals. US President Donald Trump hinted at this strategy, noting that “many, many countries” are lining up to negotiate with the US. Adding to the positive sentiment, US Treasury Secretary Scott Bessent confirmed that trade discussions are already in motion, boosting global equities and softening the Greenback’s recent strength.
In the UK, Prime Minister Keir Starmer is seizing the moment, pushing for an economic partnership with the US to sidestep the looming 10% tariffs on British exports. Speaking on Monday, Starmer expressed confidence in forging a deal that could shield the UK economy from these trade barriers. The prospect of smoother US-UK relations has lifted risk sentiment, giving Sterling a short-term lift. However, traders remain cautious, with key data releases on both sides of the Atlantic poised to shape the GBP/USD’s next move.
Looking ahead, the UK’s economic calendar is relatively quiet until Friday, when February’s Gross Domestic Product (GDP) figures drop. Market participants are also pricing in a 25-basis-point rate cut from the Bank of England (BoE) in May, with expectations of 75 basis points of easing by year-end 2025. Meanwhile, in the US, tariff buzz is overshadowing the upcoming Federal Reserve minutes. Investors are bracing for consumer and producer price inflation data later this week, which could reignite Dollar strength if inflation proves stickier than anticipated. Such an outcome might pressure GBP/USD downward once more.
From a technical perspective, the GBP/USD appears stuck in a holding pattern, likely trading sideways for the next couple of days as the market awaits US inflation numbers and UK GDP results. The pair is boxed between the 50-day Simple Moving Average (SMA) at 1.2736 and the 200-day SMA at 1.2811. A break below 1.2700 could see bears targeting the 100-day SMA at 1.2628, while a bullish push past the 200-day SMA might open the door to 1.2900. For now, Sterling’s fate hinges on the delicate dance of trade talks and economic data.
