Sterling rose in European trade on Wednesday against a basket of major rivals, extending gains against the dollar for the seventh straight session and hitting new six-month highs on strong prospects for a trade deal with the US.

Now traders await a bunch of important UK data this week, which would provide fresh pricing for the odds of a BOE rate cut in May.

The Price

The GBP/USD price rose 0.3% today to $1.3268, the highest since October 3, 2024, with a session-low at $1.3222.

The pound rose 0.35% on Tuesday against the greenback, the sixth profit in a row, and the longest such streak of daily gains since August 2024.

Trade Deal

In a statement released yesterday, US Vice President JD Vance said theres a strong chance for signing a trade deal with the UK, bolstering the economic relationship between both countries.

The UK recently escaped the worst of aggressive US tariffs, reducing the pressure on its financial markets and bolstering investor confidence in UK assets.

UK Rates

Concerns about a potential global recession receded, in turn reducing the pressure on global central banks to move quickly with policy easing and rate cuts.

Speculation about reduced UK government spending and higher taxes rose after UK Treasury Secretary Rachel Reeves asserted the governments commitment to strict financial rules..

Recently, the odds of a UK 0.25% interest rate cut in May fell from 75% to 55%.

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