Ella 
GBP/USD extended gains during early Asian trading on Monday, trading near 1.3350. The gains in major currency pairs were supported by broad-based weakness in the U.S. dollar (USD), as traders grew increasingly confident that U.S. President Trump’s economic policies would lead to a recession.
British Prime Minister Keir Starmer discussed “ongoing and productive” trade talks in his first phone call with US President Donald Trump since he imposed tariffs on British goods. According to a Downing Street official, Starmer stressed his “commitment to free and open trade and the importance of protecting the national interest.”
Starmer hopes to reach a deal with the United States after Trump announced 10% tariffs on British goods and 25% tariffs on car, steel and aluminium imports. Meanwhile, optimism surrounding US-UK trade talks continues to support GBP/USD in the near term.
Nonetheless, hawkish comments from the Federal Reserve (Fed) are likely to boost the dollar and limit upside for major currency pairs. Federal Reserve Chairman Jerome Powell said last week that escalating tariffs could boost inflation while undercutting growth, complicating the path for interest rate decisions. Powell noted that “in the meantime, we are well positioned to await greater clarity before considering any adjustments to our policy stance.”
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