- The GBP/USD falls on Monday in the middle of the appearance of some purchases around the US dollar.
- Trump’s tariffs on Colombia revive the fears of commercial war and strengthen USD of safe refuge.
- The expectations of cutting fees of the Fed and the fall of the yields of the American bonds limit the dollar and offer support to the torque.
The GBP/USD pair starts the new week with a softer and erodes part of the strong profits from Friday to the 1,2500 psychological brand, or a maximum of almost three weeks. Cash current prices currently quote around the 1,2460 region, with a 0.20% drop in the day in the middle of a modest fortress of the US dollar (USD), although the setback lacks continuation sales or bassist conviction.
The dollar (DXY) index, which follows the dollar in front of a foreign exchange basket, Trump, to impose tariffs on imports from Colombia. Trump imposed a 25% tariff on all imports from Colombia after the latter refused to allow two US military planes that transported deported migrants landed in the country. Trump also warned that tariffs will increase to 50% next week in case of more breaches, feeding concerns about global commercial wars and moderating the appetite of investors by more risky assets.
Any significant appreciation of the USD, however, seems elusive to the increase in bets that the Federal Reserve (FED) will reduce indebtedness costs twice by the end of this year in the midst of signs of decreased inflationary pressures in the USA. UU. Expectations rose even more for Trump’s comments last Thursday, saying that it will require interest rates immediately. This leads to a new fall in the yields of the American treasure bonds, which should limit the additional USD profits. In addition, uncertainty about the perspectives of a rate cut of the Bank of England (BOE) in February helps limit the losses of the GBP/USD torque.
Market participants now wait for the BOE quarterly newsletter to obtain some impulse before the US macroeconomic data of the US economic agenda on Monday includes the publication of the orders of durable goods, the confidence rate of the confidence of the trust of the trust of the trust of the trust of the trust of the confidence of the confidence of the Consumer of the Board Conference and the Richmond manufacturing index. This, together with the deepest feeling of risk and the yields of the US bonds, could influence the USD price dynamics and generate short -term trading opportunities around the GBP/USD torque.
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.
