- GBP/USD acquires the ground to about 1.3270 in the early Asian session on Thursday.
- The uncertainty in the fresh trade resulting from Trump continues to burden the US dollar.
- Traders raise their bets on lowering BOE prices in May.
The GBP/USD pair collects the strength to approximately 1.3270, where a two -day loss chain was captured during the early Asian session on Thursday. The US dollar (USD) weakens the cable due to the uncertainty surrounding Trump’s commercial policies.
The administration of US President Donald Trump has reported that it had already spoken to 90 countries about the definitions. The United States will define the customs duties of China over the next two to three weeks, and this depends on China for when the definitions can be revealed.
Moreover, Trump said on Wednesday that a 25 % tariff imposed on imported cars from Canada to the United States could rise because Trump is paying attention to enhancing US cars production and reducing dependence on foreign vehicles. The uncertainty in Trump’s tariff weakens the economic outlook and feelings that weigh green.
On the other hand, the increasing bets to reduce the prices of Bank of England at the May meeting may undermine the British pound (GBP) in the short term. Financial market pricing by about 82 % of the interest rates in England next month, as the effects of the advanced trade war in Donald Trump continues in the global economy, according to LSEG data.
The unemployed demands in the United States are scheduled to be considered later on Thursday, along with the National Activity Index in Chicago, the orders of the strong goods, and the current home sales. On Friday, retail sales data in the UK for March will be in the spotlight, which is expected to decrease 0.4 % on the basis of the month after a rise of 1.0 % in February.
Stering questions and answers to the pound
The British pound (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most trading for foreign unit (FX) in the world, as it represents 12 % of all transactions, with an average of 630 billion dollars per day, according to 2022 data. Their main trading pairs are GBP/USD, also known as “Cable”, which represents 11 % of FX, GBP/JPY, or “dragon” as it is known by merchants (3 %), and, and EUR/GBP (2 %). The pound was released by the Bank of England (Bank of England).
The only most important factor that affects the value of the British pound is the monetary policy decided by the Bank of England. The Bank of England is based on its decisions on whether it has achieved its primary goal of “stability in prices” – a fixed inflation rate of about 2 %. Its primary performance to achieve this is to adjust interest rates. When inflation is very high, the Bank of England will try to make interest by raising interest rates, making it more expensive for people and companies to reach credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to stop their money. When inflation decreases significantly, economic growth slows down. In this scenario, the Bank of England will consider reducing interest rates to licensing credit so that companies borrow more to invest in growth generation projects.
Data affects the health of the economy and can affect the value of the pound sterling. Indicators such as gross domestic product, manufacturing, services, and employment can affect the GBP direction. The strong economy is useful for sterling. Not only attracts more foreign investments, but it may encourage the Bank of England to set interest rates, which will enhance the GBP directly. Otherwise, if the economic data is weak, it is possible that the pound sterling will fall.
Issuing another important data for the British pound is the balance of trade. This indicator measures the difference between what a country gains from its exports and what it spends on imports during a certain period. If a country produces very desirable exports, its currency will benefit from the additional demand resulting from foreign buyers who seek to buy these goods. Therefore, the positive and positive trade balance enhances the currency and vice versa to achieve a negative balance.
