Pound Sterling Declines as US Dollar Gains on US-EU Trade Optimism

Pound Sterling Extends Losses Against US Dollar Amid Eased Trade Concerns

The Pound Sterling (GBP) continued to weaken against the US Dollar (USD), falling to around 1.3460 during Wednesday’s European session. This decline follows the GBP/USD pair’s peak near 1.3600 on Monday, a three-year high. The US Dollar strengthened on renewed hopes that the United States and the European Union are close to finalizing a trade deal.

The US Dollar Index (DXY), which measures the strength of the Greenback against six major currencies, rose to approximately 99.80, extending gains from the previous day.

US President Donald Trump expressed optimism on his social media platform that the EU is accelerating trade negotiations. He praised the announcement of a potential 50% tariff on EU imports, calling it a positive development. This boosted the US Dollar, helping it recover losses from earlier in the week following Trump’s tariff threats.

Despite easing trade tensions between the US and China, markets do not expect the Bank of England to cut interest rates in June, which has also influenced the GBP/USD movement.