EUR/GBP moves less than 0.8500 as the pound sterling rises to a potential UK trade agreement
- The EUR/GBP pair weakens as the pound strengthens optimism for the potential UK trade agreement.
- Boe Governor Bailey highlighted the risks due to the intensification of global trade tensions, inviting policy makers to make future decisions.
- The euro will be under pressure due to increasing expectations to cut additional interest rates in the European Central Bank.
EUR/GBP edges slightly lower on Friday during Asian trading, floating about 0.8490 after the previous two sessions. The pound pound sterling (GBP) found support during the growing optimism that the United Kingdom could enter into a trade agreement with Washington.
Market sense In addition, the expectations of the impact of mutual tariffs on Donald Trump's trade policy would be limited, given that the UK has only 10%of the largest trade partners in the United States.
Despite EUR/GBP The couple may have limited as the British pound continues to be in the headwind of constant economic uncertainty. Recent UK economic data It has been sneaky and the profit of companies has provided mixed signals, contributing to a cautious market tone.
In April, the British Manufacturing worked hard, with the final PMI data confirming the continued contraction. The decline in export arrangements was a decline over nearly five years, pressurized US tariffs and increased domestic employer taxes.
By adding a cautious outlook, The English bank (Boe) Governor Andrew Bailey noted the risks that arise by increasing global trade tensions, calling for such factors to consider in future political decisions. These problems have made traders to increase the stakes at the upcoming May 8th Policy Meeting in Boe Interest Rate. According to Reuters poll, markets have estimated the decline of 25 base points to 4.25%.
Meanwhile, the euro (EUR) will remain under pressure as expectations are increasing to cut further interest rates European Central Bank (ECB). At the Market participants, the ECB's June meeting has almost fully evaluated the cutting of 25 base points, where policy makers predict slower inflation and economic growth in the middle of the US -established tariffs on Europe.
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In the world of financial plates, two widespread concepts of “risk” and “risks” refer to the risk level that investors are willing to be on the stomach during the period referred to. In the “risk” market, investors are optimistic about the future and want to buy risky assets. “Out -of -risk” in market investors is that they are still confident if they are in the future when they are tied up when they are tied to that they are “. Modest.
Usually, stock markets increase during risk periods, including most of the gold value, including the raw materials, as they benefit from a positive growth prospect. The currencies of heavy goods exporters are strengthened due to increased demand and cryptocurrency. In the out-of-risk market, the bonds are raised-large government bonds-golden golden currencies, such as Japanese yen, Swiss frank and US dollar.
Australian Dollar (AUD), Canadian Dollar (CAD), New Zealand Dollar (NZD) and Minor FX Like Rubles (RUB) and South African Beach (ZAR), everyone tends to rise in the markets “risk”. This is due to the fact that the economies of these currencies are largely dependent on commodity exports for growth and goods tend to increase the price during the risk periods. This is due to the fact that investors will see more demand for raw materials due to increased economic activity in the future.
The main currencies that tend to rise during the risk periods are the US dollar (USD), Japanese yen (JPY) and Switzerland Franc (CHF). The US dollar because it is the world reserve currency, and because during the crisis, investors buy us a public debt that is considered safe because the world's largest economy is unlikely to pay. Yen, due to the increased demand for the Japanese government bonds, as there are major partly domestic investors who are unlikely to throw them – even in crisis. Swiss Frank, as strict Swiss banking laws provide investors with increased capital protection.
