- The GBP/USD remained on Wednesday, trapped just below 1.3000.
- The United Kingdom data is still disappointing this week while US data occupy the center of the stage.
- The US IPC inflation was moderated in February, helping to cool inflationary fears.
The GBP/USD oscillated near the recent maximums on Wednesday, building a base near the 1.3000 zone key while the markets take a moment after the US consumer price index (CPI) cool further than expected in February. The markets now expect the US Production Price Index (IPP) on Thursday, with key data on consumer’s feeling and consumer inflation expectations scheduled for Friday.
USA imposed a 25% global tariff especially the steel and aluminum imported to the US on Wednesday, initiating the next critical stage of the desire of US President Donald Trump to enter a commercial war with all US allies of the US at the same time. A recent dispute between the US and Canada reached a closure without results this week after Donald Trump threatened to double tariffs on metals in Canada just days before tariffs on US steel were scheduled to enter into force. After some round trip postures, both countries agreed that the US would impose their “normal” tariffs of 25% in steel and aluminum, and Canada would establish their own tariffs on a specific amount of goods later this week.
In February, US consumer pricing index (CPI) decreased more than expected, with the general CPI falling to an intermensual 0.2% and 2.8% year -on -year, lowering slightly faster than market predictions. Although this reading is still above the objective of 2% of the Federal Reserve (Fed), it has infused some optimism that the Fed can adjust the policy rates in the future. According to the Fedwatch of the CME tool, the rates markets now suggest more likely to a feat cut in the Fed in June, in the face of the previous expectation of July.
Almost four years have passed since the general inflation of the United States reached “transient” levels, and apart from a brief deceleration in the third quarter of 2024, the key inflation indicators have remained largely consistent since June 2023, when the inflation rate after the COVID was modeled for the first time to 3% in annual terms.
The observers of the raw materials will notice that despite the coldest readings of the CPI in February, there are underlying indicators that can raise challenges for those responsible for policies soon: while gasoline prices and fuel oil generally fell during this period – causing 3.1% and 5.1% respectively – natural gas prices increased 6% in general. In addition, inflation estimates for housing prices increased another 4.2% year -on -year, while a small 0.3% decrease in new vehicles prices hid an increase in food prices inflation, which increased 2.6% compared to the same period last year.
GBP/USD price forecast
The GBP/USD pair is experiencing its second consecutive earnings, approaching new 18 -week maximums about 1,2950. The significant resistance level of 1.3000 can limit any additional upward movement, since this key level was previously a notable consolidation point in October and November 2024.
Currently, the demand is strong among buyers, but the technical indicators have remained in overcompra territory since January, suggesting that a possible reversal could occur soon.
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.
