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The Pound Sterling ticks higher against the US Dollar at the start of Fed-BoE monetary policy announcements on Wednesday and Thursday. The Fed is expected to leave interest rates steady, while the BoE is almost certain to cut borrowing costs by 25 bps. US-China trade uncertainty is expected to persist for longer. The Pound Sterling (GBP) exhibits a mixed performance in a holiday-thinned trade as the United Kingdom (UK) markets are closed at the start of the week on account of Early May. Investors brace for significant volatility in the British currency this week as the Bank of England (BoE) is scheduled to announce the interest rate decision on Thursday.  According to analysts at Bank of America (BofA), the BoE will cut borrowing rates by 25 basis points (bps) to 4.25%, with a majority vote of 8-1. The BofA expects that Monetary Policy Committee (MPC) member Swati Dhingra to vote for a larger-than-usual interest rate reduction of 50 bps.  The BofA also believes that potential economic risks in the face of Trump’s tariffs, improving domestic inflation, and declining energy costs justify the rate reduction. For the remaining year, the bank has anticipated that the BoE could reduce interest rates twice more, excluding the rate cut on Thursday. On the global front, persistent uncertainty over US-China trade relations will keep the British currency and UK assets under pressure. The comments from US President Trump over the weekend indicated that the Sino-US trade war will not resolve in the near term. Trump said on Sunday that he is not going to speak with Chinese President Xi Jinping this week, but signaled that higher tariffs on imports from Beijing will be reduced ahead. “At some point, I’m going to lower them, because otherwise, you could never do business with them, and they want to…

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Filed under: News - @ May 5, 2025 11:26 am