GBP/USD Surges to Multi-Year High
The GBP/USD currency pair has reached a 31-month high of 1.3434, signaling a significant milestone in its upward trajectory. This surge was driven by a widespread selloff of the US dollar, fueled by improved economic indicators that have eased concerns about a potential economic slowdown.
UK Data Impact on GBP
- Despite a lack of UK data, the British Pound (GBP) continues to climb higher.
- Traders await GBP-centric data next week, starting with UK Gross Domestic Product (GDP) figures on Monday.
US Economic Indicators
- Better-than-expected US data keeps the Greenback under pressure.
- Positive US Durable Goods Orders and weekly Initial Jobless Claims reinforce the Fed’s stance on the economy.
The recent decision by the Federal Reserve to cut interest rates by 50 basis points raised concerns in global markets. However, Fed Chair Jerome Powell clarified that the rate cut was a proactive measure to support the US labor market, not a reactive response to recessionary signals.
The upcoming release of the Personal Consumption Expenditure (PCE) inflation data will be a crucial indicator of the impact of the Fed’s rate cut.
GBP/USD Price Forecast
The GBP/USD, or Cable, has been steadily reaching multi-year highs. While there are few technical obstacles in the way for Pound bulls, the strong upward momentum makes GBP/USD vulnerable to a possible downward correction.
If selling pressure builds up, the price could drop below the key support level at 1.3100 towards the 50-day Exponential Moving Average (EMA) at 1.3076.
Pound Sterling FAQs
The Pound Sterling (GBP) is the official currency of the United Kingdom and the fourth most traded unit for foreign exchange (FX) in the world. It is issued by the Bank of England (BoE) and its key trading pairs include GBP/USD (Cable), GBP/JPY (Dragon), and EUR/GBP.
Factors Influencing GBP Value
- Monetary policy decisions by the Bank of England are crucial in determining the value of the Pound Sterling.
- Data releases such as GDP, PMIs, and employment figures can impact the direction of GBP.
- The Trade Balance indicator measures a country’s exports and imports, influencing the strength of its currency.