- The sterling pound moves up against the US dollar before commercial conversations between the US and China.
- Investors expect employment data from the United Kingdom and monthly GDP later this week.
- The US president, Trump criticizes the Fed for not lowering interest rates after US NFP data showed underlying weakness.
The sterling pound (GBP) rises to about 1,3570 against the US dollar (USD) during the European negotiation session on Monday. The GBP/USD torque gains ground while the US dollar does not yield as expected amid uncertainty before commercial conversations between the United States (USA) and China in London later a day. The American dollar index (DXY), which measures the value of the dollar against six main currencies, corrects about 99.00 after a decent upward movement on Friday.
Both Washington and Beijing have confirmed that their delegates will negotiate commercial terms. The announcement came at a time when the US faces some cracks in the labor market, and the Chinese economy faces deflation.
On Friday, the US Non -Agricultural Payroll (NFP) report for May showed that accumulated jobs added in March and April were less than previously reported. However, the number of employment applicants recruited in May was 139K, slightly higher than 130K expectations. Earlier on Monday, the National Statistics Office of China reported that the prices of goods and services, measured by the Consumer Price Index (CPI), were constantly deflated in 0.1% year -on -year in May.
The president of the USA, Donald Trump, has expressed confidence in a publication in Truth Social during the weekend, stating that the commercial discussions between negotiators of both nations would pass without problems. “I am pleased to announce that Treaso Besent secretary, the secretary of Commerce Lutnick and the US commercial representative, ambassador Greer, will meet in London on Monday, June 9, 2025, with representatives of China, in relation to the trade agreement. The meeting should go very well,” Trump wrote.
Technically, the announcement of commercial conversations between the US and China should have had a positive impact on the US dollar. However, the currency is down since market experts believe that feeling will remain fragile until a significant result is seen. Saxo Market analyzes said: “An agreement to continue talking could be better than anything, but unless we see a concrete advance, the impact on feeling will probably remain moderate,” Reuters reported.
What moves the market today: the sterling pound raises before the United Kingdom’s employment data
- The sterling pound is listed up in front of its main peers at the beginning of a week full of economic data of the United Kingdom. Investors will pay special attention to the United Kingdom’s employment data for the three months that end in April and the data of the MONTHLY GRACE (GDP) Domestic Product, which will be published on Tuesday and Thursday, respectively.
- The labor market data is expected to show that the ILO unemployment rate accelerated to 4.6%, the highest level seen since July 2021. A higher unemployment rate could generate expectations in the market that the Bank of England (BOE) will cut interest rates again sooner.
- In the next monetary policy announcement on June 19, the BOE is almost certain that it will maintain stable interest rates at 4.25%. A faster growth than expected in the data of the United Kingdom consumer (CPI) index for April is the dominant reason behind the confidence of the operators in which the BOE will maintain interest rates without changes this month.
- On Friday, the member of the Monetary Policy Committee (MPC) of the BOE, Megan Greene, warned of a conference in Croatia that the recent increase in price pressures could be persistent, given its recent experience with inflation. “The last time we had many second round effects. We hope that this time we have no second round effects, but we are not optimistic about it.”
- On Tuesday, investors will also focus on the average profit data, a key measure of salary growth that promotes inflation in the services sector. The average profits, both excluding and including bonuses, are expected to have increased almost constantly by 5.5% year -on -year.
- In the US, investors will focus on the US Consumer Price Index (CPI) for May, which will be published on Wednesday. The IPC report is expected to show that inflationary pressures grew at a faster rate, a scenario that will discourage federal reserve officials (Fed) to support interest rate cuts in the short term.
- Meanwhile, the US president, Trump, has criticized the Fed again for not lowering interest rates. “Too late in the Fed is a disaster! Europe has had 10 rates cuts, we have not had any. Despite it, our country is going very well.
Technical analysis: The sterling pound rises to about 1,3570
The pound sterling jumps to about 1,3570 against the US dollar on Monday, with the aim of visiting the maximum of three years of 1,3617 reached on June 5. The prospects for the pair remain firm since the 20 -day exponential mobile average (EMA) is inclined to rise around 1,3464.
The 14 -day relative force (RSI) index remains above 60.00, suggesting that the bullish impulse remains intact.
On the positive side, the maximum of January 13, 2022 of 1,3750 will be the key obstacle to the pair. Looking down, the horizontal line drawn from the maximum of September 26, 1,3434 will act as a key support zone.
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.
