GBP/USD opened June trading on Monday with a sharp rise, back above 1.3550. The dollar came under pressure due to weaker overall USD liquidity and continued trade frictions. Meanwhile, GBP traders preferred to be bullish on the pound ahead of the Bank of England's latest monetary policy report hearing to the UK Parliament on Tuesday.

The Trump administration once again made a series of trade-related news on Monday. Last week, Trump announced plans to double tariffs on all steel imports into the United States to 50%, effective next week. The new trade measures were announced at a United Auto Workers rally last Friday. China responded to the Trump administration's accusation that China was violating preliminary trade terms reached in Switzerland in May.

Trump expressed dissatisfaction with China's approval of rare earth exports, which he considered too slow. But China countered earlier this week that they were moving forward according to the preliminary timetable reached in Switzerland and pointed out that the United States had actually violated the trade terms by imposing new restrictions on certain technology exports to China. Despite the Trump team's claims that trade negotiations are making progress, tensions between the United States and China seem to be increasing.

The Bank of England (BOE) has remained cautious in the face of the potential impact of US tariffs. The latest BoE monetary policy report statement, which is expected to be submitted to the UK Parliament on Tuesday, will emphasize policymakers' stance of keeping interest rates unchanged. Since the BoE adjusted its stance, the number of rate cuts expected this year will be far lower than many market participants initially expected, which has also given the pound solid buying support in the first and second quarters.