- The sterling pound remains strong near Tuesday’s maximum of 1,2450 against the US dollar before the January IPC data of January.
- Jerome Powell declared that the Central Bank is in no hurry to cut interest rates.
- The economy of the United Kingdom is expected to have contracted 0.1% in the last quarter of 2024.
The sterling pound (GBP) clings to profits about 1,2450 against the US dollar (USD) in the European session on Wednesday. The GBP/USD PAR exhibits strength before consumer price index (CPI) of the United States (USA) for January, which will be published at 13:30 GMT.
Economists expect the annual underlying IPC, which excludes volatile food and energy prices, has grown at a slower pace of 3.1%, compared to an increase of 3.2% in December. In the same period, it is estimated that the general inflation of the CPI has remained stable in 2.9%. The general and underlying IPC is expected to have increased 0.3%.
Market participants will pay close attention to US inflation data, which will influence speculation how long the Federal Reserve (Fed) will maintain stable interest rates in the range of 4.25%-4.50%.
The president of the FED, Jerome Powell, said the first day of his two -day testimony before the US Congress on Tuesday that the Central Bank has no “hurry to cut interest rates,” given the resistant economic growth and the persistent inflationary pressures. Powell argued that reducing the restriction of politics “too fast or too much” could “hinder inflation progress.”
Waiting for US inflation data, the American dollar index (DXY), which follows the value of the dollar against six main currencies, lightly listed up to 108.00.
What moves the market today: the pound sterling wins even though Catherine Mann supports indulgente financial conditions
- The sterling pound is listed up in front of its main peers on Wednesday. However, the perspective of the British economy is uncertain, since the member of the Monetary Policy Committee (MPC) of the Bank of England (BOE), Catherine Mann, is concerned about demand in the United Kingdom and sees the need to accommodate Financial conditions.
- On Tuesday, Catherine Mann said in an interview with the Financial Times (FT) that demand conditions are quite “weaker than the case has been.” Mann favored a greater reduction of interest rates at the policy meeting last week in which the BOE unanimously decided to cut interest rates in 25 basic points (BPS). Investors were surprised by Mann’s vote in favor of a 50 BPS rate cut, since she has been a hard line defender. On this, Mann clarified in the interview that he wanted to communicate to the operators “which we believe are the appropriate financial conditions for the United Kingdom economy.”
- Meanwhile, the US president’s international agenda, Donald Trump, will continue to keep investors sensitive to alert risk. Donald Trump is ready to announce reciprocal tariffs after signing executive orders that impose a 25% tax on steel and aluminum imports to the US without exemptions or exclusions.
- From now on, investors will focus on the data of the Gross Domestic Product (GDP) of the fourth quarter and the month of December of the United Kingdom, which will be published on Thursday. It is expected that the economy of the United Kingdom has contracted 0.1% quarter to quarter after remaining flat in the third quarter of 2024. In annual terms, it is estimated that the economy has grown 1.1% compared to the same quarter of 2023 , faster than 0.9% growth in the period from July to September.
LIBRA ESTERLINA PRICE TODAY
The lower table shows the percentage of pounding sterling (GBP) compared to the main currencies today. The sterling pound was the strongest currency in front of the Japanese yen.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.04% | 0.66% | 0.09% | 0.17% | 0.17% | -0.20% | |
| EUR | 0.10% | 0.07% | 0.76% | 0.17% | 0.28% | 0.27% | -0.10% | |
| GBP | 0.04% | -0.07% | 0.69% | 0.11% | 0.21% | 0.21% | -0.17% | |
| JPY | -0.66% | -0.76% | -0.69% | -0.58% | -0.48% | -0.50% | -0.86% | |
| CAD | -0.09% | -0.17% | -0.11% | 0.58% | 0.10% | 0.09% | -0.28% | |
| Aud | -0.17% | -0.28% | -0.21% | 0.48% | -0.10% | 0.00% | -0.37% | |
| NZD | -0.17% | -0.27% | -0.21% | 0.50% | -0.09% | -0.00% | -0.37% | |
| CHF | 0.20% | 0.10% | 0.17% | 0.86% | 0.28% | 0.37% | 0.37% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the sterling pound from the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent the GBP (base)/USD (quotation).
Technical analysis: The sterling pound maintains the profits about 1,2450
The sterling pound is traded near Tuesday’s maximum around 1,2450 against the US dollar in the European session on Wednesday. However, the PAR GBP/USD Perspective remains bassist since the 50 -day exponential (EMA) mobile average about 1,2484 continues to be an important barrier for the bundles of the pound sterling.
The 14-day relative force (RSI) index oscillates within the range of 40.00-60.00, which suggests a lateral trend.
Looking down, the minimum of January 13, 1,2100 and the minimum of October 2023 of 1,2050 will act as key support zones for the torque. Upwards, the maximum of December 30, 1,2607 will act as a key resistance.
Economic indicator
IPC EX FOOD AND ENERGY (YOY)
The IPC is published by the US Labor Department and measures prices movements through the comparison between retail prices of a basket of representative goods and services. The purchase power of the dollar is diminished due to inflation. The CPI is a key indicator to measure inflation and purchase trends. Products whose prices have high volatility, such as energy and food, are excluded to capture a more precise estimate about inflation. A reading superior to expectations is bullish for the dollar, while a lower reading is bassist.
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Next publication: MIÉ FEB 12, 2025 13:30
Frequency: Monthly
Dear: 3.1%
Previous: 3.2%
Fountain: US Bureau of Labor Statistics
The US Federal Reserve has dual mandate of maintinging Price Stability and Maximum Employment. According to Such Mandate, Inflation Should Be at Around 2% Yoy and Has Become The Weakest Pillar of the Central Bank’s Directive Ever Since The World Sufrahed to Pandemic, which extends to these days. Price Pressures Keep Rising Amid Supply-Chain Issues and Bottlenecks, With The Consumer Price Index (CPI) Hanging at Multi-Decade Highs. The Fed Has Already Taken Measures to Tame Inflation and is Expecta to Maintain An Aggressive Stance in the Foreseable Future.
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.
