- The GBP / USD is accompanied by around 1.3270 during the first Asian session on Thursday.
- A new commercial uncertainty triggered by Trump continues to weigh on the US dollar.
- Merchants increase their bets on the drop in BOE rates in May.
The GBP / USD pair brings together a force to almost 1.3270, slamming the two -day sequence of defeats during the first Asian session on Thursday. The US dollar (USD) weakens against the cable due to the uncertainty surrounding Trump's trade policies.
The administration of American president Donald Trump said that she had already spoken to 90 countries concerning the prices. The United States will set rates for China in the next two to three weeks, and it depends on China how long the prices can drop.
In addition, Trump said on Wednesday that a 25% rate imposed on imported cars from Canada in the United States could increase while Trump is pushing interest in strengthening American automobile production and reducing dependence on foreign manufacturing vehicles. Trump's pricing uncertainty reduces economic perspectives and feeling, which weigh on the greenback.
On the other hand, the growing bets of reducing the rates of the Bank of England at the May meeting could undermine the Sterling book (GBP) in the short term. The financial markets evaluated nearly 82% of a drop in BOE interest rate next month, while the effects of Donald Trump's evolving trade war continue to take place in the global economy, according to LSEG data.
The initial unemployment requests from the US Weekly are due later Thursday, as well as the national national activity index of Chicago Fed, orders for sustainable goods and sales of existing houses. Friday, data on British retail sales for March will be under the spotlight, which should decrease by 0.4% per month after the increase of 1.0% in February.
Pound Sterling Faqs
The pound sterling (GBP) is the oldest currency in the world (886 after JC) and the official currency of the United Kingdom. This is the fourth most negotiated unit for currencies (FX) in the world, representing 12% of all transactions, with an average of $ 630 billion per day, according to 2022 data. Its key trading pairs are GBP / USD, also known as “cable”, which represents 11%of FX, GBP / JPY or “Dragon” as it is known by merchants (3%) and EUR / GBP (2%). The Sterling book is issued by the Bank of England (BOE).
The most important factor influencing the value of the pound sterling is the monetary policy decided by the Bank of England. The BOE bases its decisions on the question of whether it has achieved its main objective of “price stability” – a constant inflation rate of approximately 2%. Its main tool for achieving it is the adjustment of interest rates. When inflation is too high, the BO will try to curb it by increasing interest rates, which makes people more expensive for people and businesses to access credit. This is generally positive for GBP, because higher interest rates make the United Kingdom a more attractive place for global investors to park their money. When inflation falls too low, it is a sign that economic growth slows down. In this scenario, the BOE will plan to reduce interest rates to object to the credit so that companies will borrow more to invest in growth generating projects.
Data versions assess the health of the economy and can have an impact on the value of the pound sterling. Indicators such as GDP, Manufacturing and Services PMI and employment can all influence the management of the GBP. A strong economy is good for the pound sterling. Not only does it attract more foreign investment, but it can encourage BOE to establish interest rates, which will directly strengthen GBP. Otherwise, if the economic data is low, the pound sterling is likely to decrease.
Another important version of data for the Sterling book is the trade balance. This indicator measures the difference between what a country gains from its exports and what it spends in imports over a given period. If a country produces highly sought -after exports, its currency will only benefit from the additional demand created from foreign buyers seeking to buy these goods. Consequently, a positive net trade balance reinforces a currency and vice versa for a negative balance.
