The pound rose above $1.32, a six-month high, as markets responded to easing trade fears and shifting Bank of England (BoE) expectations. Hopes that Trump might delay auto tariffs helped UK exporters, especially car parts makers reliant on US trade, lifting sentiment for sterling.

On the other hand, the BoE is seen as likely to cut rates soon — with markets nearly fully pricing in a rate cut in May — as UK firms shed jobs ahead of tax hikes and higher wage costs.

While private-sector wage growth remains high at 5.9%, employment fell sharply in March, hinting at economic weakness.

A stronger pound and softer global demand from trade disruptions may ease inflation pressures in the near term, but expected spikes in energy and regulated prices later this year complicate the BoE's path. Investors are betting on faster rate cuts, even as inflation risks remain.

Source: Trading Economics