- The sterling pound is listed laterally against the US dollar around 1,2900 while investors expect the publication of the reciprocal tariffs of US President Trump.
- The retaliation tariffs of the US commercial allies could result in a global commercial war.
- The United Kingdom fiscal agency projects a 1% reduction in the size of the economy due to the potential risks of Trump’s tariffs.
The sterling pound (GBP) moves around 1,2900 against the US dollar (USD) in the European session on Tuesday. The GBP/USD torque is flattened while investors prepare for the reciprocal tariffs of the president of the United States, Donald Trump, which will be announced in the so -called “Liberation Day” on Wednesday.
President Trump is expected to impose large tariffs on nations with significantly higher commercial surpluses in front of the US, with the aim of correcting what he calls “commercial imbalances.”
On Monday, US Treasury secretary, Scott Besent, said in an interview with Fox News that people will see “fair trade” that will make the global commercial system “just for US workers” again, and that US commercial allies will have the opportunity to reduce their “non -tariff tariffs and barriers.”
Since Donald Trump’s highest tariffs are inevitable, investors will focus mainly on the responses of US business partners. Trump tariffs are expected to mainly impact China, the Eurozone, Canada, Japan and Mexico, and any measure of reprisal of its part will lead to a global commercial war. Such scenario would be unfavorable for global economic growth, including USA, since American importers will support the impact of higher tariffs.
This week, investors will also focus on a series of business data and the US labor market, which will influence market expectations about the monetary policy of the Federal Reserve (FED). Meanwhile, Fed officials have been guiding that interest rates should remain in their current range of 4.25% -4.50% since Trump’s economic policies are expected to be inflationary to the economy.
In Tuesday’s session, investors will focus on the data of the purchasing managers (PMI) index of Global S&P manufacturing and the ISM for March, which will be published at 13:45 and 14:00 GMT, respectively. It is expected that the Global Revised Global Manufacturing PMI will remain unchanged with respect to the preliminary reading of 49.8 in March, while it is estimated that the ISM manufacturing PMI has fallen to 49.5 from 50.3 in February. A figure below 50.0 suggests that the activity of the manufacturing sector contracted.
What moves the market today: the pound sterling quotes with caution while the economic agreements between the US and the United Kingdom are delayed
- The sterling pound is quietly in front of its main peers on Tuesday, while the United Kingdom officials evaluate the potential economic risks of Trump’s tariffs, which will be revealed on Wednesday.
- On Monday, the spokesman of the United Kingdom Prime Minister Keir Starmer said that the administration has been actively preparing for all “eventualities” before Trump’s announcement about “planned tariffs”, which is expected to impact the “United Kingdom next to other countries.” Starmer added that negotiations between London and Washington to ensure an economic agreement that would have avoided tariffs have extended beyond Wednesday.
- The United Kingdom Business Responsibility Office (OBR) warns that Trump’s policies could eliminate the government fiscal mattress and reduce the size of the economy by up to 1%. Such scenario could force the Bank of England (BOE) to adopt a rapid monetary relaxation posture to stimulate economic growth. Currently, operators see the BOE reducing interest rates twice this year. The BOE has already cut interest rates once in 2025.
- In the Economic Front, investors will focus on the revised data of the Global/CIPS S&P manufacturing PMI for March, which will be published at 08:30 GMT. The manufacturing PMI is expected to remain in line with the preliminary estimates of 44.6.
Technical analysis: The sterling pound moves against the US dollar around 1,2900
The sterling pound is traded within the negotiation range of Monday against the US dollar on Tuesday. The GBP/USD pair continues to stagger around the 61.8%fibonacci setback, drawn from the maximum of September to the minimum of mid -January, about 1,2930. The 20 -day exponential (EMA) mobile average continues to support around 1,2890.
The 14 -day relative force index (RSI) cools about 60.00 after having been overcomplicated above 70.00. A new bullish impulse should arise if the RSI resumes its ascending trajectory after staying above the 60.00 level.
Looking down, the 50% fibonacci setback in 1,2770 and the 38.2% fibonacci setback in 1,2615 will act as key support areas for the torque. On the positive side, the maximum of October 15, 1,3100 will act as a key resistance 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.
