GBP/USD gains traction above 1.3250 on fresh trade uncertainty

• GBP/USD gains ground to around 1.3270 in Thursday’s early Asian session. 

• Fresh trade uncertainty triggered by Trump continues to weigh on the US Dollar. 

• Traders raise their bets on the BoE rate cut in May. 

The GBP/USD pair gathers strength to near 1.3270, snapping the two-day losing streak during the early Asian session on Thursday. The US Dollar (USD) weakens against the Cable due to the uncertainty surrounding Trump’s trade policies.  

The US President Donald Trump's administration stated that it has spoken to 90 countries regarding tariffs already. The US will set tariffs for China over the next two to three weeks, and it depends on China how soon tariffs can come down. 

Furthermore, Trump on Wednesday said that a 25% tariff imposed on cars imported from Canada to the US could go up as Trump is pushing his interest to bolster US auto production and reduce dependence on foreign-made vehicles. Trump’s tariff uncertainty dampens the economic outlook and sentiment, which weigh on the Greenback. 

On the other hand, the rising bets of the Bank of England rate reductions in the May meeting could undermine the Pound Sterling (GBP) in the near term. Financial markets have priced in nearly 82% odds of a BoE interest rate cut next month, as the effects of Donald Trump's evolving trade war continue to play out in the global economy, according to the LSEG data. 

The US weekly Initial Jobless Claims are due later on Thursday, along with the Chicago Fed National Activity Index, Durable Goods Orders, and Existing Home Sales. On Friday, the UK Retail Sales data for March will be in the spotlight, which is expected to decline by 0.4% month-on-month after rising by 1.0% in February.