- The GBP/USD maintains its position while the US dollar fights due to economic uncertainty in the US.
- Jolts job offers registered 7.39 million new jobs in April, surprisingly higher than the expected 7.1 million.
- The governor of BOE, Andrew Bailey, reiterated that interest rates are likely to go down.
The GBP/USD moves up after registering losses in the previous session, quoting around 1,3520 during Wednesday’s Asian hours. The torque could be seen as the US dollar (USD) attracts sellers under the tendency to “sell America” ​​amid the growing tariff uncertainty, which could harm the growth of the US economy.
The Employment and Work Rotation Survey (Jolts) registered 7.39 million new positions in April, more March 7.2 million. This figure arrived surprisingly above the expectation of the market of 7.1 million. Operators expect the US Non -Agricultural Payroll (NFP) report for May, which is expected to show 130K employment additions.
The US President Donald Trump, and Chinese President, Xi Jinping, soon met to resolve commercial disputes after the rejection of the Ministry of Commerce of China to the accusation of the US to the US accusation, which Beijing is violating the tariff truce reached at the beginning of this month.
The officials of the Bank of England (BOE) appeared before the Parliament to share details about the policy perspective of the Central Bank during the hearings of the Monetary Policy Report. The governor of the BOE, Andrew Bailey, expressed his belief that it is likely that interest rates will be reduced; However, he stressed that the way ahead is increasingly uncertain. Bailey also pointed out that the growing increase in global commercial tensions could potentially decelerate investment and economic growth.
The BOE audiences also indicated that there is no clear consensus on how quickly interest rates will lower. Some members are concerned that inflation can persist, while others believe that keeping rates too high for too long could damage the economy. With divided opinions, the Central Bank is likely to make the final decision in a data -based approach in the coming months.
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.
