- The GBP/USD rose on Thursday, but it is still limited below 1.3000.
- Tariff tensions have relieved for the moment, but market conditions are not yet optimal.
- A reversal in the flows of the US dollar in all areas has strengthened the market in general.
The GBP/USD took another bullish step on Thursday, driven by a generalized weakening in the US dollar demand after the US consumer price index (CPI) cool faster than expected. Together with a general relaxation in risk aversion flows after the constant carousel of intermittent tariffs of the Trump administration, the fortress of the US dollar in all areas has been decreasing, giving the pound the opportunity to recover from recent losses.
The US consumer price index (CPI) was much lower than expectations in March. The underlying IPC was reduced to 2.8% year -on -year, reaching a minimum of four years after staying stubbornly above 3.0% for almost eight months. The general CPI inflation was also reduced to 2.4% year -on -year, and investment markets will be devastated if tariffs undo years of work of the Federal Reserve (Fed) to control inflation.
This week will conclude with the results of the Survey of the consumer’s feeling index of the University of Michigan (UOM) on Friday. The UOM consumer’s feeling index is expected to contract once again in April, since consumers continue to yield to the weight of the “tariff and commercial and commercial administration of the Trump administration, and it is expected to fall to a minimum of almost three years of 54.5. Consumer inflation expectations for Friday are also expected. Consumer inflation expectations at 1 year and 5 years of the UOM were recorded at 5% and 4.1%, respectively.
GBP/USD price forecast
A third consecutive day of profits has pushed the pound to the high side, although the torque is still trapped just below the key level of 1.3000. The sterling pound recovered 1.3% against the US dollar, and the GBP/USD has risen almost 2.2% since the last minimum in the 1,2700 zone.
The price action captured a technical rebound from the 200 -day exponential mobile average (EMA), but the next immediate challenge for the bullies will be a turning point in the 1,3100 region.
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.
