- Kevin Hasset reveals that Trump explores legal options to dismiss Powell, reviving concerns about the political independence of the Fed.
- DXY falls 1.09% to March 2022 while the shares collapse and investors flee from the dollar.
- The advanced CB indicator falls more than expected; The US economic signals are weakened in the midst of the growing commercial and political uncertainty.
The sterling pound shoots more than 0.70% on Monday, since investors became distrustful of the US political leaders after the economic advisor of the White House, Kevin Hassett, affirmed that Trump is looking for ways to fire the president of the Fed, Jerome Powell. Consequently, the operators penalize the dollar, pushing the GBP/USD near the 1,3400 figure.
The pound is directed around 1.34 while Trump contemplates saying goodbye to Powell, the US dollar collapses
The mood of the market became negative when Washington again threatened the independence of the Fed. US shares are falling, while the US dollar index (DXY), which reflects the value of the ticket in front of a basket of six coins, including the pound, collapses more than 1.09% to 98.31, levels not seen since March 2022.
Chicago Fed President Austan Goolsbee said that the US does not move towards an environment in which the capacity of the Central Bank is questioned to establish monetary policy independently of political pressure.
A little economic calendar witnessed the publication of the advanced index of the US Conference (CB) for March, which decreased by -0.7% below the forecasts of -0.5% to 100.5. Justyna Zabinska-La Monica, senior manager of indicators of the economic cycle at the Conference Board, said: “The US LEI. For March he pointed to a slowdown in economic activity in the future.” He added that the decrease could be attributed to “the growing economic uncertainty in the face of pending tariffs.”
On the other side of the Atlantic, the economic agenda of the United Kingdom is light, however, the operators are pending the publication of the final readings of the Advanced S&P PMI on April 23. In the US, the speakers of the Fed will hoard the headlines, and the operators will be attentive to the PMI flash of S&P.
GBP/USD price forecast: technical perspective
The GBP/USD bullish trend remains intact, with investors attentive to a daily closure above the maximum of September 26, 1,3434, which could prepare the land to challenge the 1,3450 before buyers drive the exchange rate towards 1.35. It is worth mentioning that the Relative Force Index (RSI) has become overcapted, but the slope has broken the last peak, indicating that purchase pressure is accumulating.
On the contrary, sellers need the GBP/USD to remain below 1,3400 to continue with the hope of carrying the exchange rate below 1,3300, which is crucial to pave the way for a setback. In that case, the following support would be the minimum of April 18 in 1,3248, followed by the 1.32 mark.
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.
