- The GBP/USD has reached 1,3724, a new maximum since January 2022, Thursday.
- The president of the Fed, Powell, warned that Trump’s tariff policies could lead to more persistent inflation.
- The governor of the BOE, Bailey, highlighted the risks of a slow salary growth and the increase in economic inactivity.
The GBP/USD extends its winning streak for the fourth consecutive session, quoting around 1,3710 during the Asian hours of Thursday. The pair has marked 1,3724, a new maximum since January 2022, which was recorded on Thursday. The GBP/USD torque, sensitive to risk, receives support from the improved appetite for risk, driven by a fragile high fire between Israel and I will be mediated by the US.
The president of the USA, Donald Trump, said that the United States (USA) and they would celebrate a meeting next week, but questioned the need for a diplomatic solution on Iran’s nuclear program, citing the damage that US bombardments had caused to key sites, according to Bloomberg.
In addition, the operators evaluate the caution comments of the president of the Federal Reserve (FED), Jerome Powell. Powell pointed out Wednesday that Trump’s tariff policies could cause a specific price increase, but they could also lead to more persistent inflation. The Fed must be cautious when considering additional rate cuts.
The operators also adopt caution in the midst of speculation that the US president Donald Trump could announce a successor to the Fed President Jerome Powell, for September or October. Trump could choose the former Fed governor Kevin Warsh, or the director of the National Economic Council, Kevin Hasset, according to the Wall Street Journal.
In the United Kingdom (United Kingdom), the governor of the Bank of England (BOE), Andrew Bailey, declared in his testimony before the Committee of Economic Affairs of the LORES on Tuesday that the Central Bank has begun to see “a weakening of the labor market, and it is likely that the salary agreements will decrease.” Bailey added that the increase in employers’ contribution to social security schemes seems to be “affecting the labor market.” He also pointed out slow salary growth and increased economic inactivity.
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.
