GBP/USD experienced upward momentum following indications from US President Trump regarding potential trade negotiations. The US Customs and Border Protection has affirmed its readiness to implement country-specific tariffs on 86 trade partners. Sterling received support as the 10-year gilt yield increased to approximately 4.61%. The pair has advanced for two consecutive sessions, trading near 1.2820 during Asian trading hours on Wednesday. This appreciation is attributed to a perceived reduction in trade tensions following President Trump’s expressed openness to dialogue, fostering optimism for a possible de-escalation of trade disputes. Despite maintaining broader tariff policies, President Trump signaled a willingness to engage in discussions. Chicago Fed President Austan Goolsbee reiterated the importance of data dependency in monetary policy decisions. Market expectations, as reflected in the CME FedWatch Tool, increasingly suggest a 25-basis-point rate reduction as early as May, although a July cut remains the most probable scenario. Market participants anticipate rate reductions exceeding 100 basis points by the end of the year.
