- The GBP/USD rose another 0.75% on Monday, ascending for a consecutive week.
- The wide recovery of the sterling pound against the dollar is ready to face key data from the United Kingdom this week.
- The United Kingdom’s work figures will be published on Tuesday, followed by the United Kingdom IPC inflation data on Wednesday.
The GBP/USD rose three quarters of one percent on Monday, ascending for the fifth consecutive negotiation session while the sterling pound continues to recover land against the dollar that is weakening. Despite the firm rise of the GBP in the graphics against the USD, there are still challenges ahead with key economic data from the United Kingdom on the publications agenda for this week.
The United Kingdom’s labor data will be published early during the Tuesday London market session. The ILO unemployment rate for the 3 months that ended in February is stable at 4.4%, and the change in the number of applicants for March will be reduced to 30.3K from the 44.2K of February is expected to be stable.
The inflation figures of the consumer price index (CPI) of the United Kingdom will be published on Wednesday. It is expected that the general inflation of the United Kingdom IPC drops to 2.7% year -on -year from 2.8% of the previous period, while the underlying CPC inflation is expected to be stubbornly maintained at 3.5% year -on -year.
GBP/USD price forecast
The GBP/USD is testing maximums of several months near the 1,3200 area after having climbed for a consecutive week. The cable has risen 3.88% from the minimum to the maximum after the last oscillating minimum towards the 200 -day exponential mobile (EMA) average about 1,2700.
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.
