Sterling rallied in European trade on Thursday against a basket of major rivals, expanding the gains for the third straight session against the dollar and moving away from five-week lows as the risk appetite rebounded after the US paused most tariffs for 90 days.

The odds of a Bank of England interest rate cut in May declined as recessionary risks receded, with traders now awaiting important UK data to gather more clues.

The Price

GBP/USD price rose 0.3% today to $1.2862, with a session-low at $12810.

The pound rose 0.45% on Wednesday against the dollar, marking the second profit in a row and moving away from five-week lows at $1.2708.

Positive Sentiment

The risk sentiment rallied in the market after US President Donald Trump paused reciprocal tariffs on most countries for 90 days.

It led to historic surges in global stock exchanges, including on Wall Street, in Europe and Japan as investors pick up bargain stocks with cheap prices.

UK Tariffs

US President Trump imposed 10% tariffs on UK imports starting April 2025, with this tariff holding as both sides negotiate trade terms in the next three months.

UK Prime Minister Keir Starmer said his government will deal with the crisis calmly with a focus on reaching a trade deal that protects British interests.

UK Treasury Secretary Scott Bessent expressed hopes on reaching deals with countries such as Britain before the tariff pause is lifted in July 2025.

UK Rates

As recession concerns declined, the odds of a Bank of England 0.25% interest rate cut at the May meeting slid from 75% to 55%.

Do you need help in trading decisions? Do you want to learn how to start trading?

Join Economies.com VIP Club and benefit from over 15 years of market analysis expertise and get:

Full coverage of commodities such as gold, oil, silver, and more Full coverage of all major forex currency pairs Full coverage of key global indices and stocks Full coverage of major cryptocurrencies and meme coins Accurate analysis and daily updated price forecasts Exclusive and breaking news Reliable trading ranges for effective risk management Comprehensive educational materials, competitions and prizes! Innovative tools to enhance your trading performance Special Offer: Subscribe to the Economies.com VIP channel and get also a free subscription to a trusted trading signals channel provided by Best Trading Signal.

Join Economies.com VIP Club