- The GBP/USD lost some points to stay in a congestion zone close to 1,3300.
- The United Kingdom GDP figures exceeded expectations, and US IPP inflation also decreased more than expected.
- Key feeling figures of the US consumer in the sight for Friday.
The GBP/USD turned down on Thursday, cutting some points and maintaining the offers trapped in a short -term consolidation range just south of 1,3300, since the markets obtained more or less what they wanted from economic data publications during the market sessions of London and America. The Gross Domestic Product (GDP) of the United Kingdom and the US Price Price Index (IPP) of the US exceeded expectations, preventing markets from moving too much in any direction.
The GDP growth of the United Kingdom for the first quarter was stronger than expected, bouncing a surprising 0.7% intertrimestral. On the US side, IPP inflation decreased to only 0.1% intermencing in April, which allowed investors to breathe relieved, at least for now, since the impacts of tariffs have not affected the main economic data … at least for now.
The last consumer’s feeling index of the University of Michigan (UOM) will be published on Friday. Medium market forecasts expect an increase in the results of the consumer survey, which has fallen for four consecutive months until reaching a minimum of two years of 52.2. Investors expect the feeling of the consumer to recover slightly and push the return index to 53.4.
GBP/USD price forecast
The price action of the GBP/USD remains stubbornly trapped in a volatile area near the 1,3300 zone. The offers still cannot climb above the key price level since they receded from 1,3445 in early April, however, the bullish pressure is still firm enough to avoid a decrease below the exponential mobile average (EMA) of 50 days about 1,3110.
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.
