GBP/USD navigates on another day loaded with tariffs

  • The GBP/USD remains caught about 1,3700 while ambiguous market risks accumulate.
  • Cable operators remain largely balanced, but the dollar flows could return at any time.
  • A new batch of tariff threats along with another tariff delay is mixing badly, hindering the feeling of the market.

The GBP/USD revolved in a tight circle on Wednesday, trapped near the 1,3700 area while operators expect some significant exchange rate in macroeconomic factors. The Trump administration has accelerated tariff threats, issuing additional two -digit tariffs about a handful of countries.

Despite the increase in tariffs planned by President Trump, the feeling of the market remains approximately stable at the moment. Trump’s team has a terrible history of implementing and maintaining frequently threatened tariffs, and investors are betting on another delay at some point. Trump’s team initially announced broad “reciprocal” tariffs, which were delayed on July 9, and then again to August 1. Trump insists that this time, he really says it seriously, and they will not be delayed anymore.

Economic data is still limited this week, with dispersed medium level data available on both sides of the Atlantic. The latest minutes of the Federal Reserve Meeting (FED) showed that the Fed remains deeply buried in a waiting position, with those responsible for the Central Bank’s policy remaining apprehensive on the economic perspectives of the US of renewed tariff threats this week. The difference between those responsible for the policy on when to cut interest rates has also expanded, with several voting members of the Federal Open Market Committee (FOMC) in disagreement about whether a first rate cut should occur in July or be postponed until some time in 2026.


GBP/USD price forecast

The GBP/USD continues to rotate at the lower end of a short -term setback after going back from several years about 1,3800 to early July. The price action has inclined down; However, the cable continues to negotiate on the north side of the Exponential Mobile (EMA) side of 50 days about 1,3470. Technical oscillators have moved away from overcompra conditions, but the short -term downward impulse could still have space to advance.

GBP/USD daily graphics

LIBRA ESTERLINA – FREQUENTLY QUESTIONS


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

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