- The GBP/USD continues to float nearly 40 months around the 1,3600 region.
- Cable operators remain firm at the top end before the Fed and BOE rate decisions.
- Both central banks are expected to maintain interest rates without changes.
The GBP/USD continues to generate activity at the high end of the 40 -month -old peaks, oscillating in the 1,3600 region while cable operators enjoy a continuous impulse. The flows of the dollar continue to decrease in all areas due to geopolitical holders, keeping the pound sterling in an elevated position as the decisions of rates of the two central banks approach.
The conflict between Israel and Iran continues to overflow, with both parties launching missile attacks on several objectives and the Trump administration considering the possibility of getting directly involved in the dispute. The feeling of investors in the market in general trusts that both parties reach some kind of peace agreement before the dispute extends to the surrounding region.
The Federal Reserve (Fed) and the Bank of England (BOE) are ready to publish their latest decisions on interest rates; Both central banks are expected to maintain interest rates without changes, but the reactions of their government officials are expected to be very different.
The president of the USA, Donald Trump, has become increasingly vocal about his desire list so that the Fed begins to reduce interest rates, even when those responsible for the Fed maintain their position to “wait and see” while preparing for the economic repercussions of the “strategy” of Trump tariffs. The BOE is expected to also maintain stable rates at 4.25%, but no significant changes in politics positions, or complaints about them are not anticipated. The Fed will reveal its last decision on Rates on Wednesday, with the BOE scheduled for Thursday morning.
GBP/USD price forecast
Despite having overcome the roof and pushed towards new peaks of several years, the GBP/USD is still too close to recent congestion so that the bullies declare a definitive victory for the moment. The cable could be prepared for a new technical setback, which would put the action of the price on the way to fall again to a line of trend still ascending from the minimum of January about 1,2100.
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.
