- The GBP/USD fell briefly below 1,2400 after the BOE trimmed the rates again.
- Despite the rate cut, the tone of the BOE was a hard line, limiting more expectations.
- The US Non -Agricultural Payroll (NFP) report on Friday is coming to close the operations week.
The GBP/USD shuddered on Thursday, registering a technical rejection from key averages and testing below the 1,2400 area. The Bank of England (BOE) cut the interest rates in another 25 basic points, but adopted a hard line tone that caused rates markets to reduce their expectations of more rates cuts during the rest of 2025.
According to rates markets, the BOE is likely to carry out two or three rates cuts during the year. The nine members of the Monetary Policy Committee (MPC) voted in favor of a rate cut, with seven voting for a cut of 25 basic points and two particularly moderate members voting for a double cut of 50 basic points. Despite the accelerated enthusiasm of those responsible for monetary policy for making a rate cut in February, markets only expect about 70 basic points of the BOE reference rate to be reduced this year.
Another report of non -agricultural payroll (NFP) data is coming on Friday. Net employment additions are expected to decrease to 170K in January, from December 256k. The previous data reviews will be observed closely this week. Reviews after the publication bowed to the strongest side for 2024, frustrating market participants who were waiting for cracks in the US labor panorama to help push the Federal Reserve (Fed) towards more feats of feats .
GBP/USD price forecast
Thursday’s bearish setback saw the GBP/USD register a technical rejection of the 50 -day exponential (EMA) mobile average, playing a minimum intradica about 1,2350. The pair closed the day a bit south of 1,2450, but there could be more bassist impulse at stake while the bulls fight to maintain the impulse.
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.
