- Sterling of the pound rises to nearly 1.2600 against the US dollar due to the positive development of the Russian-Ukraine peace halt.
- There is a growing fear of President Trump's tariffs on Canada, Mexico and China.
- BOE is expected to follow a careful and progressive approach to measuring policy.
Pound Sterling (GBP) has acquired its position against the US Dollar (USD) after a two-day revision, rebounding to near 1.2610 in European trading hours on Monday. The GBP/USD pair bounces back as the US dollar's risk premium decreases due to optimism about a peace ceasefire between Russia and Ukraine. The US Dollar Index (DXY), which tracks the value of greenbacks against six major currencies, falls to near 107.25 from its two-week high of 107.65 posted Friday.
Over the weekend, British Prime Minister Kiel Starmer said that European leaders agreed to present a peace plan to Washington. The meeting between European leaders and Starme was also attended by Ukrainian President Voldymi Zelenki. Technically, signs that alleviate geopolitical tensions reduce the appeal of the US dollar's safe haven.
However, investors should avoid big bets on the US dollar due to the horror of looming tariffs. US President Donald Trump is poised to slap tariffs on Canada, Mexico and China because he did not restrict the flow of fentanyl to the United States.
U.S. Secretary of Commerce Howard Lutnick confirmed over the weekend that the president's plan to impose tariffs on Canada and Mexico on Tuesday is ongoing. However, his comments showed that there was room for negotiation over the magnitude of the tariffs.
President Trump has threatened to charge 25% on Canada and Mexico and 10% on China. Trump also slapped 10% tariffs in China in the first week of February.
Daily Digest Market Mover: Bo's Ramsden gradually supports a careful rate-cut approach, pound sterling improves
- Earlier in the week, pound's sterling trades higher against its key peers, except for the euro, due to the possibility of a peace halt between Russia and the ukrain. Furthermore, there is a solid expectation that the Bank of England (BOE) will follow a cycle with moderate policies, and a sound trade agreement between the US and the UK may be keeping the UK currency at its front foot.
- On Friday, Beau's lieutenant governor Dave Ramsden said central banks should maintain a “cautious and progressive” approach to expanding monetary policy amid uncertainty over labor markets and global trade. Ramsden warned that sustained wage growth has left inflationary pressures still rising. “We don't see the risk of sustainably gaining a 2% inflation target over the medium term as a drawback,” Ramsden said. Meanwhile, the transaction is fully priced this year with two interest rate cuts.
- While the meeting between President Trump and the UK Prime Minister's choice on Thursday did not end with a trade deal, Trump was convinced that he could agree “quite quickly” if tariffs were “not needed.”
- This week, investors will pay close attention to February's non-farm payroll (NFP) data, particularly a lot of US economic data, which will be released on Friday. Labor market data affects market expectations for the Federal Reserve (FED) monetary policy outlook. According to the CME FedWatch tool, the Fed is expected to stabilize interest rates at its policy meetings in March and May, with a 77% chance of cutting them in June.
- In Monday's session, investors will focus on US ISM and will revise S&P Global Manufacturing Purchasing Managers Index (PMI) data in February. It is estimated that ISM manufacturing PMI grew at a slightly slower pace, from 50.9 in January to 50.8.
British pound prices today
The table below shows the rate of change in the British pound (GBP) against the major currencies listed today. The British pound was the strongest against the US dollar.
| USD | EUR | GBP | JPY | CAD | aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.34% | -0.29% | -0.29% | -0.09% | -0.20% | -0.13% | -0.21% | |
| EUR | 0.34% | -0.05% | -0.14% | 0.07% | 0.04% | 0.03% | -0.04% | |
| GBP | 0.29% | 0.05% | 0.00% | 0.13% | 0.09% | 0.09% | 0.00% | |
| JPY | 0.29% | 0.14% | 0.00% | 0.41% | 0.13% | 0.20% | 0.06% | |
| CAD | 0.09% | -0.07% | -0.13% | -0.41% | 0.04% | -0.04% | -0.12% | |
| aud | 0.20% | -0.04% | -0.09% | -0.13% | -0.04% | -0.01% | -0.09% | |
| NZD | 0.13% | -0.03% | -0.09% | -0.20% | 0.04% | 0.00% | -0.08% | |
| CHF | 0.21% | 0.04% | -0.01% | -0.06% | 0.12% | 0.09% | 0.08% |
The heatmap shows the rate of change of each other's major currencies. The base currency is selected from the left column, and the estimated currency is selected from the top row. For example, if you choose the British pound from the left column and move it along the horizon to US dollars, the rate of change shown in the box represents GBP (base)/USD (QUOTE).
Technical Analysis: Pound Sterling Rebound from EMA for 20 Days
The pound's sterling mover is above 1.2600 against the US dollar on Monday. The GBP/USD pair finds the interest on the purchase after the average inversion moves to a 20-day index moving average (EMA) of nearly 1.2560.
The 14-day relative strength index (RSI) returns to the 40.00-60.00 range, suggesting that the current bullish momentum has ended. However, the positive bias remains the same.
Looking down, the lowest value of 1.2333 on February 11 serves as an important support zone for the pair. The advantage is that a 50% Fibonacci retracement of 1.2765 serves as a critical zone of resistance.
Economic indicators
ISM Manufacturing PMI
Supply Management Research Institute (ISM) The Manufacturing Punchasing Managers Index (PMI) is a business activity released monthly and measures key indicators in the US manufacturing sector. This indicator is derived from surveys of manufacturing and supply executives based on information collected within their respective organizations. Survey responses reflect changes this month compared to the previous month. Over 50 readings indicate a general expansion of the manufacturing economy. This is a bullish sign of the US dollar (USD). Reads below 50 indicate a general decline in factory activity. This is considered a bearish for USD.
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