GBP/USD appreciates to near 1.3350, rebounds due to potential US-UK trade deal

• GBP/USD strengthens amid speculation that the Trump administration is poised to announce a trade agreement with the United Kingdom.

• The US Dollar could regain traction as the Federal Reserve adopts a more cautious tone on monetary policy.

• Fed Chair Powell emphasized the impact of ongoing policy uncertainty, signaling a more measured approach to future interest rate decisions.

The GBP/USD pair rebounds from its recent losses, trading near 1.3340 during the Asian session on Thursday. The Pound Sterling (GBP) gains traction on speculation that the Trump administration may soon announce a trade agreement with the United Kingdom (UK).

According to “The New York Times”, citing three sources familiar with the matter, US President Donald Trump is expected to unveil the trade deal on Thursday. On Wednesday night, Trump hinted at the announcement in a social media post: “Big News Conference tomorrow at 10:00 A.M., The Oval Office, concerning a MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY. THE FIRST OF MANY!!!”

The GBP/USD pair is also supported by a pullback in the US Dollar (USD), which had gained in the previous session. The US Dollar Index (DXY), measuring the Greenback against a basket of six major currencies, is currently hovering around 99.70.

However, the DXY may regain momentum amid a cautious Federal Reserve (Fed) outlook. On Wednesday, the Fed held interest rates steady at 4.25%–4.50% but flagged rising risks from inflation and unemployment, adding uncertainty to the economic outlook. CME's FedWatch Tool still shows market expectations for a 25-basis-point rate cut in July.

Fed Chair Jerome Powell cautioned that ongoing trade tariffs could hinder the Fed’s inflation and employment goals in 2025. He added that continued policy uncertainty might compel the Fed to adopt a more measured, wait-and-see approach to future rate decisions.