- The GBP/USD found a support on Monday, stopping a short -term pivot towards the low side.
- The new commercial war rhetoric of the Trump administration has caused a new risk aversion in global markets.
- The deadline of tariffs on July 9 has already been postponed, but now new tariffs are coming.
The GBP/USD lost some weight on Monday, cutting even more to the low side and adding short -term losses while the sterling pound bulls take a break. The losses were contained in the commerce of the early week; However, a new round of tariff threats of US President Donald Trump has restricted the risk appetite of investors, limiting upward market flows and causing a new impulse of risk aversion towards the US dollar.
The Trump administration began the week with force, postponing its own self -imposed deadline of July 9 for the restart of reciprocal tariffs of wide reach that were initially announced and then immediately delayed in early April. Despite another change in the “firm” dates for Trump team tariffs, President Trump has announced a new batch of additional tariffs, adding levels of two -digit tariffs that will enter into force on April 1 along with suspended reciprocal tariffs.
The economic data agenda is still quite limited this week. The market approach will be firmly focused on the rhetoric of the Trump administration’s commercial war, although the last minutes of the Federal Reserve Meeting (Fed), which will be published on Wednesday, will attract some attention of the operators who seek to evaluate more thoroughly how close (or far) is the Fed to cut the interest rates.
GBP/USD price forecast
Despite a short -term rotation towards intradic weakness, the GBP/USD continues to be maintained at the high end. The pair is negotiated well above the 50 -day exponential mobile average (EMA) about 1,3465, and an immediate price floor is set from the 1,3600 area. The long -term bullish trend lines are still firm, but the cable could be due to a more pronounced correction as technical oscillators back up overstrobbed territory.
GBP/USD daily graphics
LIBRA ESTERLINA – FREQUENTLY QUESTIONS
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.
