- The GBP/USD is strengthened as the US dollar continues to weaken after the US credit qualification reduction by Moody’s.
- Those responsible for the FED policy partially blame the change in US trade policy for instability in consumers and companies.
- The sterling pound receives support from the United Kingdom inflation data stronger than expected published on Wednesday.
The GBP/USD quote up for the fourth consecutive day, with operations around 1,3430 during the Asian hours of Thursday. The increase in torque is attributed to the weakening of the US dollar (USD), which continues to face challenges after the reduction of the US credit rating of the USA AA1 by Moody’s, after similar sales by Fitch Ratings in 2023 and Standard & Poor’s in 2011.
According to Moody’s, the US federal debt is expected to reach around 134% of GDP by 2035, compared to 98% in 2023, with the budget deficit that is expected to be extended to almost 9% of GDP. This deterioration is attributed to the increase in debt service costs, the expansion of rights programs and the fall in tax revenues.
On Monday, the president of the Fed of Cleveland, Beth Hammack, and the president of the Fed of San Francisco, Mary C. Daly, expressed increasing concerns about the US economy during a panel event organized by the Bank of the Federal Reserve of Atlanta. Although the important economic indicators remain solids, both officials indicated a decrease in consumers and companies and partially blamed the change of opinion to US commercial policies.
On Wednesday, the sterling pound (GBP) extended its profits after the publication of the consumer price index (CPI) of the United Kingdom (UK) higher than expected for April. The United Kingdom National Statistics Office (UK) reported that the Consumer Price Index (IPC) rose at a robust rate of 3.5% interannual, compared to estimates of 3.3% and March reading of 2.6%. This is the highest level seen since November 2023. Meanwhile, intermensual inflation strongly increased 1.2%, compared to 1.1%estimates and the previous reading of 0.3%.
The stronger United Kingdom data than expected showed an increase in inflationary pressures, an important trigger that will discourage the Bank of England (BOE) to further support an expansive monetary policy position. Operators are likely to observe the data managers index (PMI) of Global S&P that will be published on Thursday.
Economic indicator
PMI compound global s & p
The index composed of purchasing managers (PMI), published monthly by S&P globalit is an advanced indicator that measures private business activity in the United Kingdom for both manufacturing and services sectors. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to the total production of manufacturing or services counted by the sub-director to which that company belongs. The responses of the survey reflect the change, if there is, in the current month compared to the previous month and can anticipate changing trends in official data series such as the Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 that indicate that there is no change compared to the previous month. A reading above 50 indicates that the private economy of the United Kingdom is expanding in general, which is an upward sign for sterling pound (GBP). Meanwhile, a reading below 50 points out that the activity is decreasing in general, which is considered bassist for the GBP.
Read more.
Next publication:
MAY MAY 22, 2025 08:30 (PREL)
Frequency:
Monthly
Dear:
49.3
Previous:
48.5
Fountain:
S&P global
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.
