- The GBP/USD stopped a short -term bearish turn.
- The US NFP numbers cooled market fears after overwhelming forecasts.
- The holiday in the USA on Friday will make the end of an agitated week calm.
The GBP/USD remained close to the lower end of a short -term decline on Thursday, backed by the sale pressure that forced the US dollar down after the employment data of the US non -agricultural payrolls (NFP) were stronger than expected. The markets were waiting for a report below the forecasts after this week’s ADP job view showed a strong contraction in private payrolls, but a pronounced increase in government -based educational hiring compensated the falls in the employment of the private sector.
Friday is expected to be a quiet day in terms of impact on the market. The American side of the markets closed early on Thursday and will remain closed by the holiday in the US on Friday. An average public appearance of the monetary policy of the Bank of England (BOE), Alan Taylor, is scheduled for Friday, but it is unlikely to move the markets. There is not much more material importance on the side of the United Kingdom data for Friday.
The United Kingdom government is dealing with an unequal economic slowdown, and the United Kingdom Prime Minister Kier Starmer is struggling to maintain control of the situation. The PM has been criticized for not having achieved drastic cuts in the welfare payments that were a key pillar of its electoral policies, and has also avoided completely discarding tax increases, which has generated the discontent of both the markets and the political defenders in the United Kingdom.
Strong profits in the net increases in US NFP employment have also crushed the hopes of rates in the market. The June job increase has annihilated any expectation of the market of a rate cut in the next meeting of Federal Reserve (Fed) at the end of the month, and the probabilities of three rate cuts before the end of the year have also been questioned.
GBP/USD price forecast
The GBP/USD recovered part of its land on Thursday, going back slightly after a trip in the middle of the week dragged the downward cable offers. The pair again proved an ascending line of trend near the level of 1,3600, finding technical support and stopping the drop in decline.
The GBP/USD remains well in the upward territory while the US dollar wobbles in general, and the sterling pound is ready to continue keeping close to maximum of several years. However, bidders will first have to overcome the last technical roof set just below 1,3800.
GBP/USD daily graphics
LIBRA ESTERLINA – FREQUENTLY QUESTIONS
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.
