- The GBP/USD depreciates as the US dollar gains ground in the midst of an increase in risk feeling.
- President Donald Trump prepares to announce a 50% tariff on imported copper and a 200% tariff on pharmaceutical imports.
- The United Kingdom’s budget responsibility office warned that public finances are in an unsustainable long -term trajectory.
The GBP/USD extends its loss streak, quoting around 1,3580 during Wednesday’s Asian hours. The torque depreciates as the US dollar (USD) gains ground in the midst of greater risk aversion. On Tuesday, US President Donald Trump told reporters at a White House cabinet meeting that would impose a 50% tariff on copper imports, but did not indicate when the tariff would take effect into force, according to Reuters.
President Trump expressed his intention to strengthen national copper production and reduce dependence on foreign supplies, since the United States currently imports half of his metal, mainly from Chile. The new tariff aligns red metal with existing 50% tariffs on steel and aluminum, intensifying commercial tensions and increasing volatility in the metal market.
In addition, the US Treasury Secretary. UU., Scott Besent, said that the United States has already received around 100,000 million dollars in tariff revenues this year and could see that this total shoots at 300,000 million dollars by the end of 2025, promoted by commercial measures in climbing of President Donald Trump.
The GBP/USD torque faces challenges as the sterling pound (GBP) loses ground due to concerns about fiscal perspectives in the United Kingdom (UK). The Budget Responsibility Office (OBR) has warned that public finances are in an unsustainable long -term trajectory in the United Kingdom, given the growing cost of state pensions and the growing climatic emergency.
Richard Hughes, who presides over the budgetary control agency, stressed that public debt could exceed 270% of GDP for the early 2070s, driven by the financial pressure of an aging population and the increase in medical care costs and pensions. Increased global tensions and the growing demands of a higher defense expenditure are contributing even more to long -term fiscal uncertainty.
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.
