The Pound Sterling (GBP) trades sideways around 1.2900 against the US Dollar (USD) in Wednesday's European session. The GBP/USD pair consolidates as investors have been sidelined, waiting for the release of a detailed reciprocal tariff plan by United States (US) President Donald Trump later in the day.

US President Trump has been touting April 2 as "Liberation Day" for weeks as he believes that the imposition of reciprocal tariffs will make "America great again". Trump's reciprocal tariffs are expected to upend the global trade system soon, as White House spokeswoman Karoline Leavitt signaled on Tuesday that fresh levies will become effective immediately after the announcement.

Market sentiment is expected to become excessively risk-averse if the degree of import duties comes in higher than expected. A note from the Washington Post on Tuesday showed that the White House aides have drafted a proposal to impose 20% tariffs on most imports to the US. Also, US Treasury Secretary Scott Bessent said on Tuesday that the President will sweep the highest possible levies on his major trading allies. Bessent suggested that tariffs on targeted countries could be diminished if they ease trade and non-trade barriers for imports from the US.

Donald Trump is expected to distribute the tariff collection to households through tax dividends or refunds. Such a scenario will be inflationary for the US economy, forcing the Federal Reserve (Fed) to maintain a restrictive monetary policy stance in the near term.

In Wednesday's session, investors will also focus on the ADP Employment Change data for March, which will be released at 12:15 GMT. The agency is expected to show that private employers added 105K fresh workers, higher than the 77K addition recorded in February.

Source: FXStreet