- The Israel-Iran conflict is intensifying, hitting the risk appetite in the broad market.
- The US president, Donald Trump, is considering intervening directly in the dispute, further affecting market stability.
- The US key retail sales did not meet expectations before an important presentation of the central banks.
The GBP/USD collapsed more than 1.2% on Tuesday, retreating through a short-term congestion and leaving the other side near the 1,3400 zone after global investors were disappointed with their previous hopes that the Israel-Irel dispute would find a rapid and peaceful resolution.
Donald Trump, publishing on social networks on Tuesday, declared that he wants an “unconditional surrender” of the Iranian supreme leader Ali Khamenei, and announced that US military assets were moving towards the region of the conflict in the Middle East. The climb between Israel and Iran, in addition to Trump’s decision to even more involve US assets and military personnel, has tension investors while their previous hopes of a rapid resolution wither. The Trump administration has a poor history in the successful resolution of geopolitical problems, both internal and external, despite the insistence of Trump’s team to structurally involve complex problems both at home and abroad.
The US retail sales figures for the month of May contracted drastically, falling an intermensual 0.9% as consumer expense continues to slow down. It is the second time this year that the aggregate figures of retail sales contract almost a complete point, and the previous data also saw downward reviews. Although retail sales do not have the weight that moves the market of other key indicators, such as inflation or net monthly employment gains, it remains a key factor that the Federal Reserve (Fed) considers when evaluating adjustments in interest rates. Betting in the broad market for the next reduction of Fed rates still expect a cut in September; However, the chances of at least one quarter of a quarter have decreased to almost 50% this week.
The president of the USA, Donald Trump, has become increasingly vocal about his desire list so that the Fed begins to reduce interest rates, even when Fed policies responsible maintain their position to “wait and see” while officials prepare for the economic repercussions of the “strategy” of Trump’s volatile fees. The BOE is expected to also maintain stable rates at 4.25%, but there are no significant changes in politics positions, or complaints about them. The Fed will reveal its last decision on Rates on Wednesday, with the BOE scheduled for Thursday morning.
GBP/USD price forecast
The fall of the cable on Tuesday puts the GBP/USD on the way to make a new bearish race towards the 50 -day exponential (EMA) mobile average about 1,3350, but only if the bearish impulse continues. The GBP/USD has tended to fade the bassist rebounds through 2025, with the torque still finding technical support of an ascending trend line drawn from the minimum of January about 1,2100.
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.
