Pound Sterling Gains Against US Dollar As Focus Shifts To US-China Trade Talks
The Pound Sterling (GBP) rises to near 1.3570 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair gains as the US Dollar underperforms across the board amid uncertainty ahead of trade talks between the United States (US) and China in London later in the day. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, corrects to near 99.00 after a decent upside move on Friday.
Both Washington and Beijing have confirmed that their delegates will negotiate trade terms. The announcement arrived at a time when the US is grappling with some cracks in the labor market, and the Chinese economy is facing deflation.
On Friday, the US Nonfarm Payrolls (NFP) report for May showed that the cumulative jobs added in March and April were 95K lower than previously reported. However, the number of job seekers recruited in May came in at 139K, slightly higher than expectations of 130K. Earlier on Monday, the National Bureau of Statistics of China reported that the prices of goods and services, as measured by the Consumer Price Index (CPI), deflated steadily by 0.1% year-on-year in May.
US President Donald Trump has expressed confidence in a post on Truth Social over the weekend, stating that trade discussions between negotiators from both nations would go smoothly. “I am pleased to announce that Secretary of the Treasury Bessent, Secretary of Commerce Lutnick, and US Trade Representative, Ambassador Greer, will be meeting in London on Monday, June 9, 2025, with Representatives of China, with reference to the Trade Deal. The meeting should go very well,” Trump wrote.
Technically, the announcement of US-China trade talks should have had a positive impact on the US Dollar. However, the currency is down as market experts believe that sentiment will remain fragile until a meaningful outcome is seen. Analysts at Saxo Markets said, "A deal to keep talking might be better than nothing, but unless we see a concrete breakthrough, the impact on sentiment is likely to remain muted,” Reuters reported.
Source: FXStreet
