Sterling Surge: Anticipation Builds Over Trump's Major Trade Deal Announcement

On Thursday, the British pound experienced a significant surge following an announcement from U.S. President Donald Trump, declaring his plans to unveil a 'major trade deal' later in the day. Reports suggest this could likely involve Britain, resulting in sterling's climb as high as 0.5% before settling at a 0.2% increase, even with the Bank of England's expected rate cut announcement.

The Australian dollar also reacted positively, rising by 0.6% against the U.S. dollar, while the New Zealand dollar saw a 0.5% increase before each pared their gains. Trump's statements on his Truth Social platform hinted at a potential trade pact with a highly respected country, casting widespread speculation without confirming details.

Market analysts have been anticipating a U.S. trade agreement following Britain's recent trade pact with India. Senior strategist Rodrigo Catril notes that a British deal could serve as a blueprint for other negotiations, although more complex discussions with Europe and China loom. As U.S.-China trade talks proceed, investors remain vigilant for developments in international trade relations.

(With inputs from agencies.)