- The GBP/USD rose above 1,3660 for the first time in more than 40 months on Wednesday.
- The sterling pound is receiving an impulse for the widespread sale of the US dollar.
- A handful of appearances of monetary policy of central banks splash the panorama before GDP updates.
The GBP/USD won more land while the US dollar fluctuates in all areas, extending to a third consecutive day of firm profits and reaching its highest offers in four and a half years. Several monetary policy of both, the Bank of England (BOE) and the Federal Reserve (FED), made appearances during the first half of the week, and the trend is expected to continue during the rest of it.
The president of the FED, Jerome Powell, concluded his two -day period of testimony before the Financial Committees of the Congress and the Senate on Wednesday, staying near the family script of the Fed and reiterating multiple times the waiting position and seeing the Fed Complete effects of Donald Trump’s tariff strategy.
The governor of the BOE, Andrew Bailey, will take the floor to go to the public on Thursday, where he will present discussion points at the annual conference of the British Chambers of Commerce, rightly titled “Where is the growth?” The growth figures of the Gross Domestic Product (GDP) of the United Kingdom will continue on Friday, and are expected to show a growth of 0.7% compared to the previous quarter.
Before the United Kingdom’s growth figures, the US Q1 data will be published on Thursday. The US annualized GDP is expected to remain stable at -0.2% compared to the previous quarter, while the US economy begins to deal with its own possible economic slowdown just around the corner.
GBP/USD price forecast
The GBP/USD reached a new maximum of 41 months on Wednesday, rising above 1,3660 for the first time since January 2022. The pair is on the way to closing positively for the fifth consecutive month as the US dollar weakens in general.
Cable bidders can be flying too close to the sun, since the price of GBP/USD quickly exceeds the rising trend lines, with the price action negotiating well above the exponential mobile (EMA) average of 200 days about 1,3020. Technical oscillators are in overcompra territory, warning of a possible decline on the horizon.
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.
