Sterling declined in European trade on Tuesday against a basket of major rivals, while giving up the three-year high against the US dollar on profit-taking.

The pound marked strong gains on Monday after reports that the UK and the EU will soon sign a commitment to open and free trade, in a defiant step against US tariffs.

The Price

The GBP/USD price fell 0.35% today to $1.3394, with a session-high at $1.3444.

The pound rose 1% on Monday against the dollar, the second profit in three days, hitting a three-year peak at $1.3445.

Free and Open Trade

A Politico report indicated the UK and the EU will sign a declaration of commitment to free and open trade between both sides.

Its viewed as a direct challenge to the latest aggressive US tariff policies on the EU and other trade partners.

The draft, which Politico previewed, would include promises to establish a new strategic partnership between London and Brussels, with an aim at keeping the stability of the global economic system.

UK Rates

As concerns of economic recession rise once more, pressures are renewed on most global central banks to cut interest rates and ease monetary policies.

The odds of a Bank of England 0.25% interest rate cut in May stand at 55% currently.

Now traders await a slew of new UK data on inflation, unemployment, and wages to gather more clues about the pace of rate cuts this year.

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