- The GBP/USD attracts some buyers in falls at the beginning of a new week in the midst of a moderate USD price action.
- Despite the optimistic NFP report, the USD bulls seem reluctant before commercial conversations between the US and China.
- The fundamental background justifies the caution before opening aggressive intra -diagram.
The GBP/USD pair moves up during the Asian session on Monday and, for now, seems to have stopped its backward slide from the highest level since February 2022, around the region of 1,3615 played last week. However, the rebound lacks a bullish impulse, with cash prices currently quoting around the 1,3530-1,3535 region, rising only 0.05% in the day.
The US dollar (USD) struggles to capitalize on the upward movement inspired by optimistic US employment data on Friday and starts the new week in a moderate note, which, in turn, is considered a key factor that offers support to the GBP/USD pair. In addition, the comments of the Governor of the Bank of England (BOE), Andrew Bailey, last week, saying that the Central Bank will remain in a gradual and careful approach to cut interest rates in the midst of commercial uncertainties, act as a tail wind for the pair of currencies.
Meanwhile, a Non -Agricultural Payroll (NFP) report of the US stronger than expected has reduced the hopes of imminent rates cuts by the Federal Reserve (Fed) this year. This is slowing the USD bassists when opening new positions and limiting the GBP/USD pace. Investors also seem reluctant and choose to wait on the margin before the key negotiations between the US and China in London, aimed at deactivating the high -risk commercial dispute between the two largest economies in the world.
Looking ahead, there are no relevant economic data that move the market scheduled for publication on Monday, nor from the United Kingdom or the US, leaving the GBP/USD at the mercy of the USD price dynamics. However, the fundamental background mentioned above makes a strong purchasing monitoring before positioning for the resumption of the well -established bullish trend of the pair observed during the last two months or more, or any significant intradic gain.
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.
