The Pound Sterling Surges to a Two-Week High Against the US Dollar
- US President Trump’s Call for Immediate Interest Rate Cuts Boosts Pound Sterling
- Fed Expected to Keep Interest Rates Steady on Wednesday
- Investors Await UK/US PMI Data for January
The Pound Sterling (GBP) reached a fresh high above 1.2400 against the US Dollar (USD) on Friday in response to US President Donald Trump’s comments supporting immediate interest rate cuts by the Federal Reserve (Fed). The USD weakened, pushing the GBP/USD pair higher as the US Dollar Index (DXY) dropped to near 107.60, its lowest level in over a month.
Trump’s Influence on Interest Rates
President Trump’s remarks at the World Economic Forum (WEF) calling for interest rate cuts due to declining oil prices are unlikely to sway the Fed. The Fed is committed to maintaining full employment and price stability, independent of political pressure.
Market Expectations and Data Impact
In the upcoming week, investors will closely watch the preliminary S&P Global PMI data for January, which is anticipated to show steady private business activity in the US. This data will influence the USD performance in the market.
Pound Sterling Performance and UK Economic Outlook
- GBP Expected to Hold Strong Against Major Peers Except the USD
- UK PMI Data to Shed Light on Private Business Activity Trends
- BoE Interest Rate Decision Impact on GBP Forecasts
As the UK awaits the release of the preliminary S&P Global/CIPS PMI data for January, concerns about the UK economic outlook persist. The Composite PMI is projected to indicate a slight decrease in private business activity expansion, with manufacturing contracting and service sector demand slowing.
BoE Monetary Policy and Fiscal Measures
Soft PMI figures could lead to expectations of a 25 basis points interest rate cut by the Bank of England (BoE) in the upcoming monetary policy meeting. Chancellor Rachel Reeves plans to announce new fiscal measures to meet tight budget rules, aiming to support economic stability.
Technical Analysis: GBP/USD Trends
GBP/USD nears 1.2400 after breaking above the 20-day EMA, indicating bullish momentum. The RSI suggests a reversal of bearish trends, with key support at 1.2100 and resistance at 1.2515.
Pound Sterling FAQs
- GBP: Oldest Currency, Fourth Most Traded in the World
- BoE Monetary Policy and Economic Indicators Impact GBP
- Trade Balance and Economic Data Influence GBP Value
GBP’s value is influenced by BoE decisions, economic data releases, and trade balance indicators. Strong economic indicators and positive monetary policy decisions boost GBP, while weak data leads to a decline in its value.