GBP/USD rebounds as trade woes weigh on Greenback

• GBP/USD climbed back above 1.3550 on Monday as risk sentiment drags down the US Dollar.
• The Trump administration is poised to raise steel tariffs and has given a "last call" for trade deal offers.
• The BoE is set to deliver its latest update to the British Parliament on Tuesday.

GBP/USD jumped on Monday, kicking off the June trading window by climbing back above 1.3550 after a broad-market weakening in Greenback flows. Trade frictions continue to weigh on the US Dollar, and Cable traders are leaning into the bullish side ahead of the Bank of England's (BoE) latest Monetary Policy Report hearings before British parliament on Tuesday.

The Trump administration hit another flurry of trade headlines on Monday; Donald Trump announced late lasts week that he intended to double tariffs on all steel imported into the US to 50% beginning next week. President Trump announced the new trade measure during a speech to a United Auto Workers union rally last Friday. China has responded to the Trump administration's accusations that China is violating early trade terms that the two countries tentatively reached during sideline meetings in Switzerland in May.

Read more tariff news: Trump gives Wednesday deadline for trading partners to table their best offers

Donald Trump expressed frustration at China's apparent slow-rolling of approvals for rare earths exports bound for the US; China fired back early this week, stating that they are operating within the initial timelines agreed to in Switzerland, and fired back that the US is actually the one violating trade terms by introducing new curbs on tech exports targeting China specifically. Despite constant claims from Trump staffers that deal talks are progressing, tensions between the US and China appear to be mounting.

The BoE remains increasingly cautious in the face of potential fallout from whiplash tariff policies from the US. The BoE's latest Monetary Policy Report statements, being delivered to the British parliament on Tuesday, are expected to reinforce rate-hold rhetoric from policymakers. The Pound Sterling caught a firm bid through the first and second quarters after the BoE shifted its stance to delivering far fewer rate cuts this year than many market participants had initially expected.

GBP/USD price forecast

Despite a near-term pullback, Cable continues to trade firmly into the bullish side. Bids have outrun both rising trendlines and the 200-day Exponential Moving Average (EMA), which is currently rising above 1.2900. Price action caught another leg up to reclaim chart territory north of the 1.3500 handle on Monday, and bids are within a stone's throw of setting fresh two-year highs near 1.3600.

GBP/USD daily chart