- The GBP/USD remains firmly anchored at maximum of several years above 1,3700.
- Despite the mediocre economic data of the United Kingdom, the sterling pound remains stable against the fluctuating US dollar.
- The governor of the BOE, Bailey, and the president of the Fed, Powell, are scheduled to make an appearance on Tuesday morning.
The GBP/USD continues to hit a maximum of several years above 1,3700, with the torque keeping afloat in intradic volumes scarce on Monday. The flows of the dollar continue to incline to the bearish side, maintaining the action of the price of the cable in rails and limiting the fall.
The economic data of the United Kingdom failed to move the needle on Monday, and the cable operators will focus on the double appearance of the Governor of the Bank of England (BOE), Andrew Bailey, and the president of the Federal Reserve (Fed), Jerome Powell. Both heads of Central Banks will participate in the 2025 Central Banks forum of the European Central Bank (ECB), which is carried out in Sintra, Portugal.
On Tuesday the data managers index (PMI) ISM manufacturing ISM of the United States will also be published on June for June later in the day. Medium market forecasts expect the results of the aggregate business feeling survey to rise to 48.8 from 48.5. However, investors will be attentive to any unexpected fall in business expectations, since the wide tariff policies of the Trump administration, which include a 10% global tariff over all goods imported to the US, as well as an amazing 50% tariff over all imports of steel and aluminum, begin to affect the US domestic economy.
GBP/USD price forecast
The GBP/USD had an extended tour of new 44 months last week, exceeding 1,3770 for the first time since October 2021. The pair is on its way to closing positively for the fifth consecutive month as the US dollar weakens in general.
Cable buyers can be flying too close to the sun, since the prices of GBP/USD quickly exceed the rising trend lines, with the price action quoting well above the 200 -day exponential mobile average (EMA) about 1,3020. Technical oscillators are in overcompra territory, warning of a possible decline on the horizon.
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.
