- The GBP/USD lost impulse on Tuesday, moving in territory near the 1,3500 area.
- The US data helped strengthen the feeling of investors after job offers exceed expectations.
- The key NMA PMI figures of the US ISM Services are scheduled for Wednesday.
The GBP/USD cut the bullish impulse on Tuesday, settling in a slight movement in the right graphic of 1,3500. The latest hearings of the Monetary Policy Report of the Bank of England (BOE) before the British Parliament did little to galvanize cable operators, and the feeling of the market remains in the middle while the operators expect a cooling of commercial tensions between the US and China.
Investors continue to bet on an eventual commercial agreement between President Trump and Chinese President Xi Jinping, despite the increasing commercial tensions, since both parties are mutually accused of violating the terms of the preliminary trade agreement. The Trump administration staff continues to insist that Trump and XI will speak directly soon, but the specific details remain limited.
Jolts employment offers increased to 7,391 million in April, challenging the forecast of a fall to 7.1 million. On the other hand, US factory orders were contracted more than expected in April, falling an intermensual 3.7%, its lowest figure in 15 months. The previous month also saw a strong downward review, lowering 3.4% from the initial printing of 4.3%.
The results of the Survey of the Purchase Managers Index (PMI) of US ISM Services will be published on Thursday, and investors expect a slight recovery in the feeling of added business operators. It is forecast that the impression of the PMI of May services will increase to 52.0 from April 51.6.
GBP/USD price forecast
The GBP/USD found intradic technical support in the 1,3500 zone, helping to keep the offers strengthened throughout a moderate market session. The cable bulls are beginning to show signs of tension to maintain the action of the high price, but the short side is equally weak as the torque advances well ahead of the long -term key mobile socks.
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.
