- The GBP/USD fell below 1,2900 on Wednesday.
- The markets are going back after Donald Trump renewed their promises of tariffs.
- A list in constant growth of tariffs will enter into force on April 2.
The GBP/USD collapsed on Wednesday, falling six tenths of one percent from top to bottom and retreating below the 1,2900 zone, since the feeling of the market is removed before a new lot of tariff threats from US President Donald Trump. The economy suddenly means very little while the Trump administration prepares to trigger a commercial war against all on April 2.
US President Donald Trump announces a plan to impose a 25% tariff on all imported cars
Those responsible for policies have warned that Trump’s long -term commercial war warning aspirations are beginning to harm the US economic perspectives. Red flags are also being raised by key financial agencies: according to the Standard & Poor’s (S&P) Global grades contingent, there is a 25% probability that a recession in the US begins within next year. S&P global specifically stressed that “political uncertainty in the US raises risks for credit conditions in North America.”
The inflation figures of the United Kingdom generally arrived below the market forecasts on Wednesday, helping to relieve market concerns. The next key data batch of the United Kingdom will be the final update of the GDP of the fourth quarter (Q4) and retail sales on Friday. It is expected that the GDP growth of the United Kingdom coincides with the previous figures during the fourth quarter of 2024, but retail sales figures are expected to be slightly in February.
The US GDP growth figures will also be published on Thursday, but non -preliminary impression is unlikely to drive a lot of impulse in any direction. This week’s US Key US Publication will be the Personal Consumption Expenditure Price Index (PCE) that will be published on Friday. Investors expect a recent rebound in inflation figures to prove temporary, but medium forecasts expect annualized PCE inflation to increase at 2.7% interannual in February.
GBP/USD price forecast
The GBP/USD registered another day down during the market session in the middle of the week, dragging the offers even more from the last maximum of 1.3000. The bearish pressure is beginning to accumulate, and the price action could be ready for a downward decline as the bidders lose the impulse war to the north of the 200 -day exponential mobile average (EMA) about 1,2725.
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
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.
