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The Pound Sterling recovers against the US Dollar as investors’ risk appetite improves on hopes of de-escalation in the trade war between the US and China. The Fed is expected to keep interest rates steady, while the BoE is almost certain to cut them next week. Investors await the US NFP data for April, which will influence the Fed’s monetary policy outlook. The Pound Sterling (GBP) bounces back to near 1.3320 against the US Dollar (USD) on Friday after a three-day correction. The GBP/USD pair gains as the market sentiment has turned cheerful after comments from the Chinese Commerce Ministry increased hopes of a de-escalation in the trade war between the United States (USD) and China.  On Thursday, the Chinese ministry signaled that the country is ready to discuss trade terms with Washington but emphasized that talks should be based on “sincerity”. “China says the door is open to trade talks with the US and urged the US to demonstrate sincerity if it wants trade talks,” Bloomberg reported. Investors have taken these comments from Beijing as a constructive step towards resolving trade disputes between the world’s two largest nations. The optimism on Sino-US trade resolution has resulted in an increase in demand for risk-perceived currencies.  Market participants believe that Beijing won’t need to sell its products into other markets if the US continues to buy them. Investors were worried about fears that China would dump its products into European and Asian economies if its tariff war with the US continues. Given China’s low-cost competitive advantage, the competitiveness of products from other nations would have diminished in the global market. Such a scenario would have been unfavorable for their economic growth. Though investors have underpinned the Pound Sterling against the US Dollar, it is underperforming among more risky peers on firm…

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Filed under: News - @ May 2, 2025 9:26 am