- The GBP/USD rose almost a percentage point on Thursday.
- The United Kingdom’s GDP was firmer than expected, and US IPP figures were consolidated after the review.
- The US retail sales are still on their way to Friday, but tariff threats have softened.
The GBP/USD recovered on Thursday, uploading more than nine tenths of a percentage point and reaching the 1,2560 region after the economic data was generally better than expected on both sides of the Atlantic. The Gross Domestic Product (GDP) of the United Kingdom exceeded the medium forecasts of the market, and the inflation figures of the US Production Price Index (IPP). They calmed the concerns of investors after an increase in inflation at the level at level of consumer this week.
President of the United States Donald Trump: Plan for reciprocal tariffs in process
The president of the United States Donald Trump made a great revelation of his last idea to increase tax revenues against strong administrative tax cuts. The “reciprocal tariffs”, plans to impose rates on countries that have tariffs on US products, are scheduled to take shape in the coming months, with US Secretary of Commerce Howard Lutnick in charge of working on details.
The schedule of new tariff threats remains elusive, and investors are valuing the new tariff threats as something that will not happen, as well as the “first day tariffs” of President Trump, and tariffs on Canada and Mexico, and Specific cars, microchips and pharmaceutical tariffs. In total, there are many concepts of a plan to impose strong taxes on imports on US consumers and companies, but very little real progress, and investors are committed to the trend will continue.
Forex today: the markets now look at the tariffs and foundations of the USA.
The GDP of the fourth quarter of the United Kingdom stood at 1.4% year -on -year, well above the 1.1% prognosis, and rising even more from the 1.0% revised of the previous period. The intertramestral GDP also exceeded expectations, rising to 0.1% against the prosticated contraction of -0.1%.
On the US side, IPP business inflation exceeded expectations, but strong reviews to the previous figures gave investors the opportunity to interpret the last price data batch as a sample of relief in the inflationary pressures. The underlying inflation of the IPP for the year that ended in January stood at 3.6% year -on -year, well above the 3.3% forecast but a point below the 3.7% revised figure, which was initially recorded at 3.5%.
The US retail sales are everything that remains in the barrel for the rest of the key data of the week. The markets will wait for another firm result, with the monthly figure of reticted retailed sales for a slight contraction of -0.1% compared to the previous 0.4%.
GBP/USD price forecast
After weeks of bullish effort, the GBP/USD is finally back over the 50 -day exponential mobile average (EMA) near the 1,2500 zone. There is still much downward space for the bulls to fall after several weeks of congestion, but the next immediate technical barrier is in the 200 -day EMA parked just below 1,2700.
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.
