- The sterling pound is recovered to 1,3470 against the US dollar while investors reassess the impact of the US court against tariffs.
- The US court dismissed Trump’s tariff policy, citing it as a violation of constitutional limits.
- The IMF has slightly raised its GDP growth forecast from the United Kingdom for the year to 1.2%
The sterling pound (GBP) recovers early losses against the US dollar (USD), after reaching a minimum of 1,3415, and flatly quotes around 1,3470 during Thursday’s European negotiation hours. The GBP/USD pair bounces as the US dollar yields a part of its initial profits, since the verdict of the United States International Trade Court against the tariffs of President Donald Trump further increases economic uncertainty.
The event also seems critical for business owners, who began to design their supply strategies, considering Trump’s taxes such as the new normality for the global economy.
The US dollar index (DXY), which tracks the value of the dollar against six main currencies, rises only 0.25% around 100.10, which was around 100.50 earlier in the day.
Earlier in the day, the US dollar (USD), bond yields, And US actions won strongly after the Manhattan court blocked Donald Trump to impose most tariffs.
The Court condemned the use of Trump of the International Emergency Emergency Powers Law (IEEPA) of the Carter era to justify its international agenda, citing it as an exploitation of the president’s authority. The court has dismissed the import rights announced by him in the so -called “Liberation Day”, while specific tariffs by sector, such as cars, metals and semiconductors, remain intact.
Meanwhile, the Court has issued a period of 10 days to the Administration for a permanent court order of the Liberation Day tariffs, to which the White House appealed shortly after the decision.
What moves the market today: the sterling pound wins after the IMF review of the GDP growth of the United Kingdom at 1.2%
- The sterling pound is listed up against its main peers on Thursday, since the International Monetary Fund (IMF) has slightly raised the growth forecast of the Gross Domestic Product (GDP) of the United Kingdom for the current year to 1.2% from 1.1% after the solid economic performance observed in the first quarter.
- The National Statistics Office (ONS) reported in the middle of the month that the economy expanded at a robust rhythm of 0.7%, compared to 0.6% estimates and a nominal growth of 0.1% observed in the last quarter of 2024.
- Another reason behind the strength of the British currency is the market expectations that void that the Bank of England (BOE) will reduce interest rates again at the June policy meeting. The operators have trimmed the BOE dovish bets before a consumer price index (CPI) of the United Kingdom Human than expected and a solid growth in retail sales data in the United Kingdom for April.
- This week, investors will focus on the data of the US Personal Consumption Expenditure Index (PCE) for April, which will be published on Friday. It is expected that the underlying inflation data of the US PCE, which is the preferred inflation indicator of the Federal Reserve (Fed), have grown at a moderate rate of 2.5% year -on -year, compared to the previous publication of 2.6%.
Technical Analysis: Esterlina pound attracts offers about 1,3430
The sterling pound bounces against the US dollar on Thursday after attracting offers near the horizontal support set from the maximum of September 26, 1,3434. The perspective of the PAR is still firm since the 20 -day exponential mobile average (EMA) is inclined to rise around 1,3385.
The 14 -day relative force index (RSI) struggles to stay above 60.00. The bullish impulse would end if the RSI falls into the range of 40.00-60.00.
On the positive side, the maximum of January 13, 2022 of 1,3750 will be a key obstacle to the pair. Looking down, the 20 -day EMA will act as an important support area.
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.
