- The GBP/USD showed little movement compared to the recent price share on Thursday.
- The impulse is faltering after a strong correction in the expectations of rate cuts.
- Investors are preparing before the key employment figures of the US NFP on Friday.
The GBP/USD faltered on Thursday, ending a spectacular three -day streak that saw the sterling pound earning 2.57% of minimum to maximum against the dollar from the beginning of the week. A sudden readjustment in the expectations of rates cuts from the central banks means that the cable will see a differential of interest much more thin than what was previously anticipated, which causes a hard rebalancing in the currency markets.
Forex today: Non -agricultural payrolls of the US are approaching!
Rate markets are now valuing less than 50 PBs in feat cuts by the Bank of England (BOE) in 2025, a strong reduction in the expectations of rates cuts as central banks continue to deal with persistent inflation. In spite of a general weakening in the domestic economy of the United Kingdom that would normally cause a response of rates by the BOE, the still high inflation metrics have tied the hands of those responsible for politics.
The US president, Donald Trump, made another turn in his tariff plans, announcing temporary relief in tariffs for all products included in the USMCA agreement that he himself negotiated during his first mandate. Despite the continuous retraction of the Trump administration on its own tariff threats, the markets could not find enough appetite due to the risk to incline the markets back to the high side.
The US Non -Agricultural Payroll (NFP) will acquire a new importance on Friday as investors begin to observe the economic data. Although the US economy is in a healthy general place, cracks begin to be shown in the labor market. A new round of inflationary pressures, largely attributed to tariff concerns, is also hindering growth expectations.
GBP/USD price forecast
The GBP/USD found an obstacle in the 1,2900 zone, freezing the short -term bullish race and compressing intradic offers in a tight consolidation candle. The cable exceeded 200 days about 1,2685 easily, but the bullish impulse is taking a break.
Technical oscillators are still fixed in overcompra territory, limiting the bullish potential. However, a continuous pattern of higher minimums is incorporated into the graph as the price action advances from the technical minimum in 1,2100 in mid -January.
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.
