The GBP/USD bounces in a key mobile average as tariffs are coming

  • The GBP/USD captured a slight rebound from the 200 -day EMA about 1,2700 on Tuesday.
  • The markets are preparing before the implementation of tariffs planned by the US
  • The appetite for risk is slowly recovering, but general fears persist.

The GBP/USD broke a tough two -day loss streak on Tuesday, finding a technical rebound from the 200 -day exponential mobile average (EMA) just north of the 1,2700 zone. The price action remains stagnant in no man’s land before the implementation of tariffs planned by the USA, and investors are preparing with key inflation and feeling figures of the US that will be published later this week.

Forex today: Market attention moves towards the Fed minutes

In general, it is still a quiet week on the British side of the economic data calendar, and on Tuesday it was a welcome relief of the usual flood of geopolitical and commercial headlines that have become the norm in recent weeks under the Trump administration. Even so, several Key Policies of the Federal Reserve (FED) took the opportunity to come to light, warning that uncertainty and unwanted inflationary effects of US tariffs will make it more difficult, not easier, that the Fed begins to cut rates.

Completely imperturbable, rates operators continue to accumulate bets that the Fed will be forced to enter a cycle of feat cuts during the rest of the year, since the negative economic impacts of those same tariffs could push US to a recession. According to the CME Fedwatch tool, rates swap operators are beginning to assess hopeful bets that a first quarter of a quarter could arrive as soon as in May. However, most of the rate market still see a 25 basic points cut in July as more likely, with a total of 100 basic points or more at stake for the end of the year.

GOLSBEE OF THE FED: Tariffs are much larger than anticipated
Daly of the Fed: I am a little worried that inflation can increase again

The inflation figures of the US Consumer Price Index (CPI) are scheduled for Thursday, with the US production price inflation results (IPP) and the US feeling index of the feeling of the consumer of the University of Michigan (UOM) both scheduled to be published on Friday. This will be the last outbreak of key inflation figures and feeling of the US of the 2025 Phase, marking a key indicator for the rest of the calendar year.

GBP/USD price forecast

The GBP/USD captured an upward break on Tuesday, finding a slight rebound from the 200 -day EMA just above 1,2700. The bullish impulse is still an anemic borderline, but the purchase pressure was enough to cut a two -day loss streak that saw the cable lose more than 3% from top to bottom.

Bidders will still need to extend from the EMA of 200 days before confirming a bullish recovery, but the short impulse seems to have evaporated too fast to allow new sales positions.

GBP/USD daily graphics

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

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