- The GBP/USD rises as the agreement between the US and Japan reduces 15% tariffs and ensures 550,000 million dollars in Japanese investments.
- Bafa awaits a rebound in the summer of the GBP despite the fragile fiscal perspective of the United Kingdom.
- Traders observe the preliminary PMIs of the United Kingdom and the US and unemployment applications in the US to obtain new orientations.
The GBP/USD rose more than 0.30% on Wednesday, driven by an optimism in appetite for risk after the announcement of the commercial agreement between the US and Japan, which increased the demand for high beta currencies such as sterling pound and other currency of raw materials. At the time of writing, the par is quoted in 1,3574, having reached a daily minimum of 1,3515.
The pound earns more than 0.30% as the improved feeling raises the foreign currencies of Alto Beta despite persistent tax concerns in the United Kingdom
On Tuesday, US President Donald Trump announced that an agreement had been reached, under which Japanese imports to the US would be subject to 15%tariffs. Previously, the White House sent a letter to Japan, setting tariffs at 25%, including cars. The agreement would force Japan to invest hundreds of billions of dollars in the US, with approximately 550 billion dollars in funds for investments in the US.
Although the pound has been weakening due to tax concerns, Bank of America (Bofa) analysts expressed that the third quarter for the British economy could be good.
They said: “We feel that the conditions are now given for a rebound in the GBP during the summer months”, adding that “we do not underestimate the fragile state of the public finances of the United Kingdom, but we are still surprised by how the markets are willing to find the United Kingdom guilty of fiscal violations before (giving) the opportunity to prove their innocence.”
This week, the United Kingdom’s economic agenda will present the preliminary reading of the PMI Flash of Global S&P for July. On the other side of the ocean, the US economic agenda will also present the PMI Flash, together with the publication of the data of initial unemployment applications for the week ending on July 19.
GBP/USD price forecast: technical perspective
From a technical point of view, the upward trend remains intact, but the GBP/USD needs to overcome the 20 -day SMA in 1,3564. The momentum indicates that buyers are gaining strength, as shown in the relative force index (RSI).
That said, if the torque exceeds the 20 -day SMA, the next resistance would be the figure of 1,3600. A rupture of this last will expose the 1,3650 mark, followed by 1,3700. On the contrary, if the GBP/USD falls below the 50 -day SMA in 1,3520, the following support would be 1,3500. Additional demand levels are below, with the minimum daily of July 21 in 1,3402.
LIBRA ESTERLINA PRICE THIS WEEK
The lower table shows the percentage of sterling pound (GBP) compared to the main currencies this week. Libra sterling was the strongest currency against the US dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.03% | -1.13% | -1.01% | -0.76% | -1.14% | -1.12% | -1.01% | |
| EUR | 1.03% | -0.02% | 0.02% | 0.23% | -0.16% | -0.28% | -0.02% | |
| GBP | 1.13% | 0.02% | -0.18% | 0.30% | -0.10% | -0.03% | 0.20% | |
| JPY | 1.01% | -0.02% | 0.18% | 0.24% | -0.09% | -0.16% | 0.18% | |
| CAD | 0.76% | -0.23% | -0.30% | -0.24% | -0.30% | -0.34% | -0.27% | |
| Aud | 1.14% | 0.16% | 0.10% | 0.09% | 0.30% | -0.04% | 0.28% | |
| NZD | 1.12% | 0.28% | 0.03% | 0.16% | 0.34% | 0.04% | 0.24% | |
| CHF | 1.01% | 0.02% | -0.20% | -0.18% | 0.27% | -0.28% | -0.24% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the sterling pound from the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent the GBP (base)/USD (quotation).
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.
