- The commercial agreement between the US and the United Kingdom supports the pound; Trump maintains 10% tariffs but opens a broader access to the market.
- The BOE cuts rates in 25 basic points in a divided vote; The operators now see Julio as the earliest for another cut.
- The DXY falls 0.37% to 100.26 while Fed officials adopt a cautious tone in the middle of a solid labor market and a deceleration growth perspective.
The pound sterling registered solid profits on Friday, rising 0.41% after the announcement of a commercial agreement between the US and the United Kingdom on Thursday. However, a rate cut by the Bank of England (BOE) limited its profits, but the pair continues to quote about 1.33 after bouncing from a daily minimum of 1,3211.
The GBP/USD rises as the commercial pact drives the feeling while the BOE Dovish tone is compensated by the weakness of the dollar and the cautious comments of the Fed.
The president of the United States, Donald Trump, and the United Kingdom Prime Minister Keir Starmer announced a bilateral commercial agreement, which maintains Trump’s 10% tariffs on British exports, but opens markets for both countries. The news limited the fall of the GBP/USD after the BOE decided to cut rates in 25 basic points (BPS), with a vote divided into three ways, where seven of the nine officials voted in favor of a cut, but two of them supported a 50 BPS cut. On the Hawkish side were two of the nine members,
Previously, the governor of the BOE, Andrew Bailey, said that the commercial agreement was good, although he pointed out that 10% tariffs are maintained on most British exports, which are higher than before last month.
The next BOE cut until July
Meanwhile, interest rates expectations for the BOE suggest that operators are reducing the possibilities of a cut in June, but see a 50% probability in July.
The pound remains in their earnings supported by a weak US dollar. The dollar (DXY) index, which tracks the performance of a six pairs basket against the dollar, is 0.37% below 100.26.
As for data, the US economic agenda presents several speakers of the Federal Reserve. The governor of the Fed, Adriana Kugler, declared that the labor market is close to the maximum employment and pointed out that monetary policy is currently moderately restrictive.
New York Fed president John Williams said that price stability is essential for Fed, expects inflation to return to 2% and projects that growth slows considerably. He added that politics is in a good place.
The president of the Atlanta Fed, Raphael Bostic, said it is not prudent to adjust the policy amid uncertainty.
GBP/USD pricing: technical perspective
The GBP/USD maintains an upward trend, although it is prepared to finish the week near its opening price, indicating a balance between buyers and vendors. The impulse remains bullish, as the relative force index (RSI) shows, but the price action says otherwise. Although there is no divergence, buyers need to recover 1,3400 to print a higher maximum and would have the opportunity to test the annual peak of 1,3443. With more force, the next roof is 1.35.
On the contrary, if the GBP/USD remains below 1,3300, the first support is 1,3250 followed by the minimum of 1,3211.
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 Canadian dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.57% | -0.42% | 0.30% | 0.92% | 0.49% | 0.50% | 0.47% | |
| EUR | -0.57% | -0.70% | 0.00% | 0.63% | 0.20% | 0.22% | 0.18% | |
| GBP | 0.42% | 0.70% | 0.48% | 1.34% | 0.90% | 0.93% | 0.88% | |
| JPY | -0.30% | 0.00% | -0.48% | 0.63% | 0.20% | 0.30% | 0.29% | |
| CAD | -0.92% | -0.63% | -1.34% | -0.63% | -0.72% | -0.41% | -0.45% | |
| Aud | -0.49% | -0.20% | -0.90% | -0.20% | 0.72% | 0.02% | -0.02% | |
| NZD | -0.50% | -0.22% | -0.93% | -0.30% | 0.41% | -0.02% | -0.06% | |
| CHF | -0.47% | -0.18% | -0.88% | -0.29% | 0.45% | 0.02% | 0.06% |
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.
