- GBP/USD is around 1.2965 in the Asian session on Monday, adding 0.21 % a day.
- Fears of economic slowdown in the United States withdraw the US dollar less.
- The UK’s retail sales increased unexpectedly in February.
GBP/USD pair collects a power to nearly 1.2965 during Asian trading hours on Monday. Fears that US President Donald Trump’s tariff will ignite inflation and inhibit economic growth on the US dollar (USD) and act as a leader of the main husband.
Last week, Trump announced a 25 % tariff on imported cars and light trucks that are scheduled to enter into force on April 3. This procedure comes above a 25 % flat tariff on steel and aluminum, and declaring the Tram’s imminent tariff on Wednesday. Many analysts are concerned that the customs tariff will have a negative impact on the American economy, even at a time when it limits the Federal Reserve opportunity to reduce interest rates while increasing inflation in the short term. This, in turn, the USD may pull less and raise the GBP/USD pair in the short term.
Bruce Kasman, the chief economist at JPMorgan: “The recession risk has become high – to a 40 % probability – regarding concerns that aggressive American policies have struck business and living.”
UK data showed that retail sales were amazing in February, and the support of the pound sterling (GBP). On Friday, the National Statistics Office showed that the UK’s retail sales increased by 1.0 % in February 1.4 % before 1.7 %). This number came stronger than estimating a decrease of 0.3 %. “The best news about retail sales in the first quarter provides a glimmer of hope that this will change,” said Roth Gregory, Economic Consulting.
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.
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