Sterling resumed its climb, regaining the 1.33 handle, again, after mixed U.S. data weighed on U.S. Treasury yields and pressured the dollar lower, and for now despite several failed attempts to break higher, cable remains capped by the May 14 high at 1.3361 and anchored by its flat 10-day moving average near 1.3282..

Thursday's U.S. data came with notable revisions, reflecting the turbulent market environment since President Trump’s inauguration and the early-April “Liberation Day.” While trade tensions have eased following the U.S.-China tariff delay, recent data—skewed by front-loaded activity—should be interpreted cautiously.

In the yield curve, while the UST 3-month/10-year spread has flattened, the longer end continues to steepen amid lingering budget and debt ceiling concerns. These issues could keep long yields elevated, limiting dollar downside.

Technically, GBP/USD is unlikely to stray far from its current range, with short-term U.S.-UK rate expectations largely aligned for the rest of 2025, according to LSEG's IRPR.

Barring a fresh inflation shock or renewed tariff tensions, the 1.32–1.3450 range is likely to hold. This kind of environment may lead traders to gravitate toward straddle sales or strangle buys to manage risk within a range-bound market, avoiding the intermittent volatility and still-considerable Trump headline risk.
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(Paul Spirgel is a Reuters market analyst. The views expressed are his own)