GBP/USD extends the rally to near 1.3350 on softer US Dollar

• GBP/USD attracts some buyers to around 1.3350 in Monday’s early Asian session. 

• The UK hopes to strike a deal with Trump after he imposed 10% tariffs on most imports of British goods to the US. 

• Fed's Powell said the US central bank remains in wait-and-see mode. 

The GBP/USD pair extends its upside to near 1.3350 during the early Asian session on Monday. The uptick of the major pair is bolstered by the softer US Dollar (USD) broadly as traders become increasingly confident that the economic policies of US President Donald Trump will lead the economy to a recession. 

UK Prime Minister Keir Starmer and US President Donald Trump discussed "ongoing and productive" trade talks in their first call since Trump imposed tariffs on UK goods. According to a Downing Street official, Starmer emphasized his commitment to "free and open trade and the importance of protecting the national interest." 

Starmer is seeking to reach an agreement with the US after Trump announced 10% tariffs on UK goods and a 25% rate on imports of automobiles, steel, and aluminum. Meanwhile, the optimism surrounding the US-UK trade talks continues to underpin the GBP against the Greenback in the near term. 

Nonetheless, the hawkish remarks from the US Federal Reserve (Fed) could lift the USD and cap the upside for the major pair. Fed Chair Jerome Powell said last week that escalating tariffs could fuel inflation while undermining growth, complicating the path for interest rate decisions. Powell noted, “For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.”