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The GBP/USD pair attracted some selling around the 1.3310 level in early Friday trade, pressured by a pick-up in demand for the United States dollar (USD). UK retail sales data for March will be in focus later on Friday.
The US dollar edged higher on optimism over the US trade deal announcement, which is currently acting as resistance for major currency pairs. British Chancellor of the Exchequer Rachel Reeves said on Thursday she was confident that Britain could reach a trade deal with the United States.
Reeves is scheduled to meet with U.S. Treasury Secretary Scott Bessent on Friday. High on the agenda will be discussions on a possible trade deal, which Britain hopes will reduce the impact of Trump’s import tariffs on its goods exporters, including cars and steel. Investors look forward to further progress in U.S.-UK trade negotiations.
A gloomy outlook for the UK economy and rising expectations for further rate cuts by the Bank of England (BoE) are likely to drag the British pound (GBP) lower. The International Monetary Fund (IMF) expects the Bank of England to cut interest rates three times and lowered its forecast for UK gross domestic product (GDP) growth in 2025 from 1.6% to 1.1%.
On Friday, UK retail sales data for March will be closely watched. The figure is expected to fall 0.4% month-on-month in March after rising 1% in February. If the results are stronger than expected, this could help limit losses for the pound in the near term.
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