- The British pound succumbs to a recovery inside the day against the US dollar, despite the inequality in the United States.
- Investors are increasingly confident that the American economy can enter the recession.
- PM In the UK, Starmer pledges to house local companies from the possible global trade war.
The British pound (GBP) abandons the recovery step inside the day and decreases to nearly 1.2800 against the US dollar (USD) during the North American session on Monday, which is the lowest level seen in one month. The GBP/USD pair faces an intense sale of the US dollar as the US dollar seeks to obtain a floor, with the US dollar index (DXY), which tracks the value of Greenback for six main currencies, with the aim of sticking to 103.00.
The view of the US dollar is still unconfirmed because the participants in the financial market are increasingly concerned about the United States (United States) Economic expectationsWith Federal Reserve Chair (Fed) Jerome Powell Warning that the larger customs tariff is expected by President Donald Trump on Wednesday can lead to the return of inflation and slow economic growth. “We are facing an unconfirmed look with high risks to both high unemployment and high inflation,” Powell said in his notes prepared at the annual conference of the Business Liberation and Writing Association on Friday.
When he was asked about the influence of Trump’s tariff on monetary policy expectations, Powell continued the “waiting and look” and said: “The federal reserve is in a good position to wait for greater clarity before considering policy amendments.”
Meanwhile, market experts now see a greater opportunity for Trump’s sweeping tariff, harsh expected for American trading partners, can push the American economy to stagnate. Investment banking companies Goldman Sachs and JP Morgan have raised the possibility of the United States to enter 45 % and 60 %, respectively.
This week, investors will focus on the US consumer price index data (CPI) for the month of March, which will be released on Thursday. It is expected that the impact of the US consumer price index data is limited to US dollars unless there is a major change, as the market expectations of monetary policy expectations at the Federal Reserve Bank are driven by the tariff -led tariff. Consumer enlargement expectations.
Daily Digest Market Movers: Pound Steling Weakens against the US dollar
- The pound offers a very volatile movement against its peers at the beginning of the week. The British currency is affected by Trump’s uncertainty, which is expected to strike the UK (UK) economy strongly.
- UK companies are expected to face great competition in the global market, as business owners have slapped with much higher definitions by the United States, who will search for other markets for their products. Such a scenario will be favorable for a country that is already struggling to deal with narrow financial conditions.
- the England Bank (BOE) maintains a strict “gradual and cautious” stance on more monetary policy that reduces inflationary pressures far from the required rate of 2 %. The chances of reducing inflation in the UK in the short term in the short term, as England officials have already warned that price pressures may accelerate before returning to a 2 % course due to high energy prices.
- Meanwhile, UK Prime Minister Kiir Starmer has pledged to protect local companies from the Trump tariff storm. “We are ready to use the industrial policy to help harbor British business from the storm,” Starmer said during the weekend, Reuters. Starmer also indicated that he wanted to boost alliances and reduce commercial barriers.
- This week, investors will focus on the monthly GDP (GDP) and factory data for February, which will be released on Friday.
Technical analysis
the sterling It is struggled to recover after slipping to approximately 1.2820 against the US dollar on Monday. The GBP/USD pair decreases to less than 20 -day SIA moving average (EMA), around 1.2930, indicating that the almost certain range has become uncertain.
The relative strength index decreased for 14 days (RSI) below 60.00, indicating that the upscale momentum has ended. However, the bullish prejudice is sound to maintain a level of 40.00.
Looking at the bottom, Fibonacci alternative by 50 % was drawn from the lowest level in late September to mid -January near 1.2770 will serve as a major support zone for the husband. On the upper side, the highest level on April 3 will be 1.3207 main resistance zone.
Fed questions and answers
The monetary policy in the United States is formed by the Federal Reserve (Fed). The Federal Reserve has two states: to achieve price stability and enhance full employment. Its primary performance to achieve these goals is to adjust interest rates. When prices rise very quickly and inflation is 2 % higher than the Federal Reserve goal, it raises interest rates, which increases borrowing costs throughout the economy. This leads to the most powerful USD (USD) because it makes the United States a more attractive place for international investors to stop their money. When inflation decreases to less than 2 % or the unemployment rate is very high, the Federal Reserve may reduce interest rates to encourage borrowing, which weighs on the green back.
The Federal Reserve (Fed) holds eight political meetings annually, as the FOOC Open Market Committee (FOMC) evaluates economic conditions and takes monetary policy decisions. FOMC attends twelve officials of the Federal Reserve-the seven members of the Governor, the President of the Federal Reserve in New York, and four regional regional presidents, the remaining regional regional, who serve for one year on a roundabout.
In extreme situations, the Federal Reserve may resort to a policy called quantitative mitigation (QE). QE is the process that the Federal Reserve increases significantly from the flow of credit in a suspended financial system. It is a non -standard policy scale used during crises or when inflation is very low. The Federal Reserve’s favorite federal weapon was during the great financial crisis in 2008. It includes the printing of the Federal Reserve more than dollars and their use to buy high -quality bonds from financial institutions. QE usually weakens the US dollar.
The quantitative tightening (QT) is the reverse process of QE, as the Federal Reserve stops buying bonds from financial institutions and the manager does not re -invest from mature bonds, to buy new bonds. It is usually positive for the value of the US dollar.
