- The GBP/USD fell for the second consecutive session as the cable bets back.
- The United Kingdom side of the data remains light for the rest of the week.
- The minutes of the Fed meeting revealed a firmly apprehensive Fed, with key US data ahead.
The GBP/USD cut more profits on Wednesday, stumbling for the second consecutive session and retreating below 1,3500 after a failed attempt to recover 1,3600 earlier this week. The libra sterling markets are going back from the upper end of a bullish streak that led the cable to maximum of several years, however, the impulse still favors the bidders of the sterling pound.
The last minutes of the Federal Reserve Meeting (FED) of the Federal Open Market Committee (FOMC) on the May 6-7 meeting revealed that the waiting and seeing approach of the Fed has deep roots. Those responsible for the policy at the last meeting of the Fed pointed out that the status of safe US dollar (USD) has suffered a coup recently. They warned that a more “lasting” change in the status of the dollar could have lasting impacts on the US economy.
Almost all members of the FOMC at the May Rate Meeting agreed that inflation risks could be more “persistent than expected.” With the Fed staff directly citing the impacts of tariffs as a key factor in the weakened perspective of the FOMC on the US economy, the FOMC has attributed US economic conditions on deterioration and the uncertain perspective on inflation and growth to the swinging policies of the Trump administration.
The rest of the trade week remains heavy on the American side. The growth of the Gross Domestic Product (GDP) of the US Q1 is scheduled for Thursday. On Friday, the trade week will conclude with the inflation data of the US Personal Consumption Expenditure Index (PCE) for April. The markets expect continuous relief in the key inflation indicators before the repercussions of the Trump administration policies begin to filter into the main data sets.
GBP/USD price forecast
The cable is still caught in a bassist trend with offers sinking into 1,3450. However, the price action remains firmly planted in the bullish territory, with daily candles running well above the 50 -day exponential mobile average (EMA) about 1,3210.
In general, the pound sterling has had a great performance in 2025, rising 11.3% from the minimum of several months in mid -January in the 1,2100 zone. The cable has completely reversed the losses through the last quarter of 2024, rising to maximum of several years about 1,3450 this week.
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.
