- The GBP/USD goes back to about 1,3230 from a maximum of more than six months of 1,3300.
- The positive development in commercial conversations between the US and Japan has offered some relief to the US dollar.
- Weak inflation data in the United Kingdom have paved the way for interest rate cuts by the BOE.
The GBP/USD PAR is low to about 1,3230 during Thursday’s European negotiation hours. The cable slides down while the US dollar (USD) attracts some offers for significant progress in commercial conversations between the United States (USA) and Japan.
The US dollar index (DXY), which tracks the value of the dollar against six main currencies, bounces about 99.50 from the minimum of three years of 99.00.
Investors see this as a sign that the growing global economic uncertainty, promoted by the imposition of strong tariffs by US President Donald Trump, will decrease in the midst of the growing confidence that Trump be tilted towards bilateral agreements that avoid a commercial war with all nations.
Meanwhile, the sterling pound (GBP) continues to surpass its other peers despite the fact that weak inflation data and the gloomy panorama of the labor market have raided the way for a relief of monetary policy by the Bank of England (BOE). Inflation in the United Kingdom services sector, which is closely followed by BOE officials, slowed 4.7% in March from 5% in February. The United Kingdom employers are expected to offer less employment opportunities to compensate for the impact of the increase in contribution to social security schemes.
The sterling pound struggles to extend its winning streak against the US dollar for the eighth day of negotiation on Thursday and drops to about 1,3230. However, the short -term perspective of the torque is optimistic since all long -term exponential mobile socks (EMA) are inclined to the rise.
The 14 -day relative force (RSI) index has shown a V -shaped recovery from 40.00 to about 70.00, suggesting a strong bullish impulse.
A new upward movement would appear if the torque breaks above the maximum of April 16, 1,3292. Such movement will lead to the maximum of September 25, 1,3430, followed by the round level of 1,3500.
On the contrary, a downward movement below the minimum of April 15, 1,3164 will take it to a minimum of April 14, 1,3063 and at the psychological level of 1.3000.
GBP/USD daily graphics
LIBRA ESTERLINA FAQS
The sterling pound (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most commercialized currency exchange unit (FX) in the world, representing 12% of all transactions, with an average of $ 630 billion a day, according to data from 2022. Its key commercial peers are GBP/USD, which represents 11% of FX, GBP/JPY (3%) and EUR/GBP (2%). The sterling pound is issued by the Bank of England (BOE).
The most important factor that influences the value of sterling pound is the monetary policy decided by the Bank of England. The Bank of England bases its decisions itself has achieved its main objective of “price stability”: a constant inflation rate of around 2%. Its main tool to achieve this is the adjustment of interest rates. When inflation is too high, the Bank of England will try to control it by raising interest rates, which makes access to credit for people and companies more expensive. This is generally positive for sterling pound, since higher interest rates make the United Kingdom a more attractive place for global investors to invest their money. When inflation falls too much it is a sign that economic growth is slowing down. In this scenario, the Bank of England will consider lowering interest rates to reduce credit, so that companies will borrow more to invest in projects that generate growth.
Published data measure the health of the economy and can affect the value of sterling pound. Indicators such as GDP, manufacturing and services PMI and employment can influence the direction of the sterling pound.
Another important fact that is published and affects the pound sterling is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will benefit exclusively from the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
