GBP/USD breaks below 1.3300 as US Dollar appreciates on a potential US-China trade deal

• GBP/USD edges lower after a Bloomberg report indicated China may suspend its 125% tariff on select US imports.
• The Greenback's momentum was tempered as US Initial Jobless Claims rose to 222,000, slightly exceeding expectations.
• UK sentiment weakened, with GfK Consumer Confidence dropping to -23 in April--its lowest level since November 2023.

GBP/USD is retracing its recent gains, hovering around 1.3290 during Friday's Asian session. The pullback comes as the US Dollar (USD) strengthens, bolstered by a Bloomberg report suggesting China may suspend its 125% tariff on select US imports, including medical equipment, ethane, and aircraft leasing.

Sources familiar with the matter noted that officials are particularly evaluating a waiver on tariffs for plane leases. China's Ministry of Finance and the General Administration of Customs have yet to comment. Further supporting the Greenback is optimism surrounding US trade negotiations. Reuters reports progress in preliminary talks with key Asian allies, including South Korea and Japan.

The US Dollar Index (DXY), which tracks the USD against six major currencies, is recovering previous losses, trading near 99.80. However, the Greenback faced headwinds following mixed labor data. The US Department of Labor suggested Initial Jobless Claims rose to 222,000 for the week ending April 19--slightly above expectations--while Continuing Claims declined by 37,000 to 1.841 million for the week ending April 12.

In the United Kingdom (UK), GfK Consumer Confidence slipped to -23 in April--its lowest level since November 2023--amid rising living costs and growing global trade concerns, missing forecasts of -22. Traders now await UK Retail Sales data and the final reading of US Michigan Consumer Sentiment later in the North American session.