April 15, 2025 – Written by Frank Davies

STORY LINK GBP/USD Forecast: Pound Sterling Strikes Six-Month Best on UK-US Trade Deal Hopes

GBP/USD climbed to a six-month best buy exchange rate on Tuesday, buoyed by a risk-positive market mood and rising speculation over a potential UK-US trade agreement.

The Pound exchange rates enjoyed support on Tuesday as investors embraced riskier assets, pushing the increasingly risk-sensitive UK currency higher against its safe-haven counterparts.

This rally came despite a mixed UK labour market report. While wage growth remained relatively robust in the three months to February, the figure undershot forecasts, prompting some traders to raise their expectations for a potential Bank of England (BoE) interest rate cut in May.

Adding to Sterling’s strength were fresh signs of progress towards a UK-US trade deal. Comments from US Vice-President JD Vance suggested the UK could secure more favourable terms than its European peers, stating:

‘I think there’s a good chance that, yes, we’ll come to a great agreement that’s in the best interest of both countries.’

The remarks helped lift sentiment toward the Pound throughout the session.

Meanwhile, the US Dollar (USD) came under pressure on Tuesday as investors shifted away from the safe-haven currency in favour of riskier assets.

Sentiment was boosted after the US confirmed that electronics would be excluded from the newly announced 145% tariffs on imports from China.

Additionally, Donald Trump signalled that potential tariffs on imported cars and car parts could be delayed, giving automakers more time to establish production facilities on American soil.

This combination of easing trade tensions and upbeat risk appetite left the US Dollar struggling for support.

Looking ahead, the UK’s latest consumer price index, due Wednesday morning, could shape the direction of GBP/USD.

Analysts are forecasting a modest slowdown in inflation, which may reinforce expectations of a BoE rate cut and apply downward pressure on the Pound.

Later in the day, US retail sales data for March is expected to show strong growth – a result that could help the US Dollar recover some ground.

Traders will also be keeping an eye on developments around US trade policy and potential UK-US trade talks. While recession concerns in the US could continue to drag on the Dollar, any renewed optimism about a trade pact could offer the Pound fresh support.

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TAGS: Pound Dollar Forecasts