Sterling pounds against the US dollar when US President Trump begins the World Trade War
- The British pound decreases to less than 1.2300 against the US dollar, as the market morale turns into a freedom after US President Trump imposes a customs tariff on Canada, Mexico and China.
- Investors are awaiting economic data related to US employment and the decision of England’s Banking Politics this week.
- The Bank of England is expected to reduce interest rates by 25 basis points to 4.5 %.
The British pound (GBP) is circulating much lower to approximately 1.2250 against the US dollar (USD) at the European session on Monday. Earlier in the day, the GBP/USD husband had an opening in the gap the gap as a definition on Canada, Mexico and China by the President of the United States (United States) Donald Trump, forcing investors to switch to safe and safe deception.
The emotional market feelings led to a sharp increase in the US dollar (USD), which leads strongly in a turbulent environment. The US dollar index (DXY), which tracks the value of Greenback for six main currencies, combines 109.50, which is the highest level that has been seen in more than two weeks.
President Trump slapped 25 % on a tariff for Canada, Mexico and 10 % in China during the weekend. Trump had already threatened to raise the definitions of his partners in North America to allow illegal immigrants and deadly opioid fentanels to enter the country.
On the Economic Front, investors will pay close attention to the economic indicators related to the labor market this week, which will affect market speculation about the period that will be kept by the Federal Reserve (Fed) for interest rates at their current levels. After the policy meeting on Wednesday, when the Federal Reserve left interest rates unchanged at 4.25 % -4.50 %, President Jerome Powell said that monetary policy amendments will not become appropriate only when they see “real progress in inflation or some weakness in the labor market.”
In Monday’s session, investors will focus on the USMI’s Procurement Manager Index (ISM) Industrialization (ISM) and PMI global manufacturing data in January. It is estimated that the ISM manufacturing manager has improved to 49.5, and is still less than the 50.0 threshold that separates the expansion of the shrinkage, from 49.3 in December, indicating that the factory activities are contracting but at a slower pace.
Daily Digest Market Movers: The British pound will be affected by the decision of England Bank Politics
- The British pound is mixed with a mixed performance against its main peers on Monday, as investors focus on the monetary policy decision of England, which will be announced on Thursday.
- Trading is confident that the Bank of England will reduce interest rates by 25 basis points (BPS) to 4.50 %. Among the MPC -led monetary policy committee, seven members are expected to vote to reduce the interest rate by 25 basis points, while two are expected to prefer to maintain interest rates unchanged. Politics maker at Boy Catherine Mann, who was an explicit falcon, is expected to be one of these two members.
- Participants in the market are sure of the low interest rates in the Bank of England due to the slowdown in inflationary pressures in the UK (UK) and increasing risks to demand for soft labor. The basic consumer price index (CPI) – which excludes the prices of volatile elements such as energy and food – abandoned 3.2 % in December. Labor market data for the three months ending in November showed that the economy added 35 thousand new workers, as business owners slowed the recruitment process due to dissatisfaction with the RACHHES Reeves of raising the contribution of employers to national insurance (NI).
Technical Analysis: The pound drops less than 1.2300
The pound returns to approximately 1,2250 after failing to extend the recovery over the 50 -day moving average (EMA), which trades around 1.2500, last week. The near -term cable outlook has turned down as it slipped down the EMA for 20 days, which hovers about 1.2388.
The relative strength index decreases for 14 days (RSI) to approximately 40.00. Will the husband face a declining momentum if RSI dive below this level
Looking at the bottom, the lowest level on January 13 at 1.2100 and the lowest level in October 2023 of 1.2050 will serve as major support areas for the husband. In the upward direction, the December 30, 1.2607 will be a major resistance.
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 of foreign unit (FX) in the world, as it represents 12 % of all transactions, with an average of 630 billion dollars a 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 is known by merchants (3 %), and EUR/GBP (2 GBP (2 %). The pound sterling 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.
