- Pound Sterling Grip has earned more than 1.2900 against the US dollar as investors expect Trump's policies to reduce the momentum of US growth.
- Fed's Powell reiterated that central banks need to be more clear before adjusting monetary policy.
- Boe's Mann opposes a progressive and careful approach to monetary policy easing.
Pound Sterling (GBP) will stick to winning just over 1.2900 against the US Dollar (USD) in Monday's European session. The GBP/USD pair will be strengthened as the US dollar struggles to gain ground amid concerns about the US (US) economic outlook. The US Dollar Index (DXY), which tracks the value of greenbacks against six major currencies, is traded carefully near the 1030-month lowest.
Market participants are increasingly worried about the US economic outlook after comments from President Donald Trump on Friday showed that his “America's first” policy could lead to economic disruption in the short term.
President Trump declined to lead to economic impacts from his policies, but in an interview with Fox News, he said there was a “term of transition.” His comments came after being asked whether his policies could lead to economic recession.
Donald Trump has repeatedly said mutual tariffs will be announced on April 2nd. Last week, Trump imposed a 25% tariff on imports from Canada and Mexico, but exempt many products within the US-Mexico-Canada Agreement (USMCA) for a month. He also increased the additional fee for Chinese imports to 20% by imposing an additional 10%.
Market experts continue to believe Trump's tariff policy is inflation for the economy, but have changed their perceptions of the impact on the economic outlook. At one point when Trump's agenda was expected to accelerate the economic expansion, it is now expected to destroy the economy. This led to a global brokerage company revising its growth forecast for the US economy. Goldman Sachs downgraded its GDP growth forecast for the fourth quarter 2025 from 2.2% to 1.7% from previous forecasts, increasing the probability of a 12-month recession from 15% to 20%.
Investors also expect the Federal Reserve will be forced to resume its policy-measuring cycle as early as June. But Fed Chairman Jerome Powell repeatedly said on Friday at the University of Chicago Booth School's Economic Forum that interest rate policies are in “good condition” and that the central bank wants to clarify Trump's policies before making any monetary policy adjustments.
Daily Digest Market Mover: Pound Sterling Trading is Low to Friends
- Poundsterling slows down peers' performance at the beginning of the week as Catherine Mann, a member of the Bank of England (BOE) Monetary Policy Committee (MPC), rebuttal the need for a “gradual and prudent” financial policy mitigation approach, as led by the majority of BOE officials who have surpassed the testimony before testifying beyond the mediocre policy committee and beyond the fiscal committee in February. Thursday.
- Mann opposed a medium-sized approach to financial expansion amid the substantial volatility of the global market. She also stated that the pre-estimation of a gradual approach to monetary policy “is no longer effective” because of “substantial volatility” from financial markets, particularly from “cross-border outflows.”
- A day before Mann's speech, four BOE officials, including Gov. Andrew Bailey, approved a gradual path to “removing monetary policy restrictions” as the sustainability of inflation is unlikely to disappear “in its own agreement.”
- It is worth noting that Katherine Mann was one of two BOE officials who voted for a larger interest rate cut of 50 basis points (BPS) in the February rate decision.
- This week, investors will focus on job openings in the US Jolz in January and monthly GDP data for the UK (UK) and US Consumer Price Index (CPI) data for February. At this point, traders are hoping that BOE will cut interest rates twice this year.
Technical Analysis: 61.8% FIBO retracement at 1.2930 approx. 61.8%
Sterling of the pound is striving to break in beyond the 61.8% Fibonacci retracement plotted from mid-January to mid-January. The long-term outlook for the GBP/USD pair has become bullish as it exceeds the 200-day index moving average (EMA). This is about 1.2690.
The 14-day relative strength index (RSI) rose above 70.00, suggesting strong bullish momentum.
Looking down, a 50% FIBO retracement at 1.2767 and a 38.2% Fibo retracement at 1.2608 serve as the main support zone for the pair. As an advantage, the psychological level of 1.3000 acts as an important zone of resistance.
Pound Sterling FAQ
Pound Sterling (GBP) is the oldest currency in the world (886 AD) and is the official British currency. According to data from 2022, it is the fourth most traded forex (FX) in the world, accounting for 12% of all transactions, with an average daily average of $630 billion. Its main trading pair is GBP/USD, also known as “cable”, which accounts for 11% of FX, GBP/JPY, or “dragon”, as is known for traders (3%) and EUR/GBP (2%). Poundsterling is issued by the Bank of England (BOE).
The only most important factor affecting the value of sterling in the pound is monetary policy determined by the Bank of England. The BOE is based on a decision on whether it has achieved its main goal of “price stability.” This is a stable inflation rate of around 2%. The main tool to achieve this is interest rate adjustments. If inflation is too high, BOE will try to curb it by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP. This is because higher interest rates make the UK a more attractive place for global investors to park their money. If inflation is too low, we can see that economic growth is slowing. In this scenario, the BOE will consider lowering interest rates to make credit cheaper, and consider borrowing more to allow the company to invest in growth projects.
Data assesses economic health and may affect the value of sterling in the pound. Indicators such as GDP, manufacturing and services PMI, and employment can all affect the direction of the GBP. A strong economy is good for Sterling. Not only will it attract more foreign investment, it may also encourage BOEs to raise interest rates. This directly enhances GBP. Otherwise, sterling in the pound could fall if economic data is weak.
Another important data release for Pound Sterling is trade balance. This indicator measures the difference between what a country makes from exports and what it spends on imports over a certain period of time. If a country produces highly popular exports, the currency will purely benefit from the extra demand generated from foreign buyers seeking to buy these goods. Therefore, a positive net trade balance strengthens the currency and vice versa.
