- The GBP/USD depreciates as the US dollar is strengthened before the next publication of the US personal consumption expenditure index.
- The dollar can be seen while the yields of the US Treasury bonds at 2 and 10 years break a four -day run streak.
- The sterling pound faces pressure amid increasing expectations that the BOE will cut interest rates in its May monetary policy meeting.
The GBP/USD It extends its fall per second consecutive session, around 1,3390 during Wednesday’s Asian negotiation. The torque is under pressure as the US dollar is strengthened by a renewed optimism around commercial developments between the US and China. Operators now focus their attention on the next publication of the Personal Consumption Expenditure Index (PCE) underlying of the US for March, a key inflation indicator for the Federal Reserve.
The US dollar index (DXY), which measures the USD compared to six main currencies, remains comfortably above the 99.00 mark, meanwhile, there is a rebound in the yields of the US Treasury bonds of 3.66% and 4.17%, respectively, at the time of writing this text.
In the data front, the US Jolts report on Tuesday revealed a drop in job offers to 7.19 million in March, its lowest level since September 2024, which suggests a slowdown in labor demand. The figure did not meet expectations and highlighted the growing economic uncertainty.
Adding to the downward pressure of the GBP/USD torque Bank of England (BOE) will cut the rates at your May meeting. The softer inflation expectations in the United Kingdom and the increase in winds against global economics have fed moderate bets.
The BOE policy head, Megan Greene, recently commented that the tariffs proposed by US President Donald Trump could lead to lower inflation in the United Kingdom, although important uncertainties remain with respect to the broader economic impact and recent tax increases for employers.
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.
