- The GBP/USD drops to about 1,3310 in the first measures of the Asian session on Friday, with a 0.21% drop in the day.
- The United Kingdom Finance Minister said she was sure that Great Britain could reach a commercial agreement with the US.
- The March Retail Sales Report of the United Kingdom will be the center of attention later on Friday.
The GBP/USD torque attracts some vendors around 1,3310 during the first Asian session on Friday, pressed by the renewed demand of the US dollar (USD). The United Kingdom retail sales data will be the culminating point later on Friday.
The dollar is strengthened in the midst of optimism on an announcement of US trade agreement, which acts as a wind against the main torque at the moment. The United Kingdom Finance Minister Rachel Reeves said on Thursday that she was sure that Great Britain could reach a commercial agreement with the USA.
Reeves is scheduled to meet with US Treasury Secretary, Scott Besent, Friday. On the agenda there will be a possible commercial agreement, which Great Britain hopes that it reduces the impact of Trump import tariffs on its exporters of goods, including cars and steel. Investors expect more developments in commercial conversations between the US and the United Kingdom.
The gloomy economic panorama of the United Kingdom and the growing bets of additional cuts of fees by the Bank of England (BOE) could drag the pound sterling (GBP) down. The International Monetary Fund (IMF) anticipated three interest rate cuts by the BOE and has reviewed the growth of the Gross Domestic Product (GDP) of the United Kingdom by 2025 to 1.1% from 1.6% previously predicted.
Retail sales data from the United Kingdom for March will be closely followed on Friday. The figure is expected to decrease 0.4% intermensual in March after increasing 1% in February. In case of a stronger result than expected, this could help limit the losses of the short -term GBP.
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.
