Select Language

GBP/USD sheds 1.34 amid Greenback rebound

blockHeadVisual
  1. HOME
  2. Get information
  3. World FX news
  4. GBP/USD sheds 1.34 amid Greenback rebound

World FX news

search
Breaking news

GBP/USD sheds 1.34 amid Greenback rebound

  • X
  • facebook
  • LINE
  • RSS
  • X
  • facebook
  • LINE
  • RSS
New update 2024.09.26 08:30
GBP/USD sheds 1.34 amid Greenback rebound

update 2024.09.26 08:30

  • GBP/USD turned bearish and dropped back below 1.34 on Wednesday.
  • Markets pared back their recent tilt into a Pound Sterling bull run.
  • The US Dollar recovered ground as investors weigh the state of the US economy.

GBP/USD struck an abnormally nearish tone on Wednesday, plunging back below the 1.3400 handle amid a broad-market pullback from full-bore risk appetite. The Pound Sterling paused its recent one-sided trend into the high side, while the Greenback pared recent losses.

The Pound Sterling will be entirely absent from the economic calendar data docket for the remainder of the week, leaving GBP/USD traders to grapple with Friday's upcoming US inflation print.

US consumer confidence indicators fell this week as the average US consumer doesn't share in the stock market's exuberance over Fed rate cuts, with key confidence readings falling to their lowest levels in three years and consumer inflation expectations for the next 12 months ticking higher. This Friday will see a fresh update to US Personal Consumption Expenditure (PCE) inflation figures.

New home sales also fell in August, declining 4.7% to 716K from the previous month's revised 751K. Meanwhile, investors will see another print of US Gross Domestic Product (GDP) growth for the second quarter, expected to hold steady at 3.0% on an annualized basis. Thursday will also bring a slew of speeches and public appearances from several Fed officials, including Fed Chair Jerome Powell.

Economic Indicator

New Home Sales Change (MoM)

The number of New Home sales released by the US Census Bureau is an important measure of housing market conditions. House buyers spend money on furnishing and financing their homes so as a result the demand for goods, services and the employees is stimulated. Generally, a high reading is seen as bullish for the USD, whereas a low reading is seen as bearish.

Read more.

Last release: Wed Sep 25, 2024 14:00

Frequency: Monthly

Actual: -4.7%

Consensus: -

Previous: 10.6%

Source: US Census Bureau

GBP/USD price forecast

Wednesday's bearish reversal has pulled Cable back below 1.3400, and price action is poised for a continuation into the low side. Particularly brassve short sellers will be targeting the 50-day Exponential Moving Average (EMA) all the way down at 1.3062. GBP/USD bidders will be looking to recover ground back into 30-month highs set this week at 1.3430.

GBP/USD daily chart

Pound Sterling FAQs

The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, aka 'Cable', which accounts for 11% of FX, GBP/JPY, or the 'Dragon' as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).

The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of "price stability" - a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.

Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.

Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

 

Date

Created

 : 2024.09.26

Update

Last updated

 : 2024.09.26

Related articles

Show more

Writer

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?
No loading Yes loading

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Previous article

prev

Fed's Kugler says she strongly supported half-point rate cut

Next article

EUR/USD faces harsh rejection from 1.12 amid Greenback bounce

prev

Most viewed

GBP/JPY weakens after Takaichi defeat removes impediment to rate hikes

GBP/JPY declines by almost one and a half percentage points to trade in the 191.50s on Friday after the news that former Japanese defense minister Shigeru Ishiba beat his opponent Sanae Takaichi to win the ruling-LDP party's leadership race run-off.
New
update2024.09.27 22:17

OPEC sees oil demand continuing to rise until 2050 - Commerzbank

OPEC published its long-term outlook for the oil market up to 2050 this week, Commerzbank's commodity analyst Carsten Fritsch notes.
New
update2024.09.27 22:00

The Fed now the dove and the ECB the hawk - Commerzbank

The Bank of England and the Fed were expected to cut rates slightly less than the ECB.
New
update2024.09.27 21:50

USD/CNH closes below 7.00 for the first time since May 2023 - DBS

CNY appreciated 0.5% overnight on China's stimulus hopes, and CNH did better with a 1.0% again, DBS FX analyst Philip Wee notes.
New
update2024.09.27 21:19

Strong increase in Indian Gold imports, whereas imports by China collapse - Commerzbank

The two most important consumer countries of Gold have recently been sending out very different signals.
New
update2024.09.27 21:16

Gold reaches new record high, silver at 12-year high - ING

On Thursday, the Gold price rose to a new record high of $2,685 per troy ounce.
New
update2024.09.27 21:11

USD/CHF: Still remains in the month-long range between 0.84 and 0.8550 - DBS

The Swiss National Bank's third interest rate cut did not push USD/CHF out of its month-long range between 0.84 and 0.8550, DBS' FX analyst Philip Wee notes.
New
update2024.09.27 20:57

Mixed markets with a weakish USD tone - DBS

The Dollar Index (DXY) depreciated by 0.4% to 100.56 overnight, holding below 101 for the ninth session, DBS' FX analyst Philip Wee notes.
New
update2024.09.27 20:46

High price level likely to slow the physical demand for Gold - Commerzbank

The Gold market continues to rush from record high to record high; nevertheless, the high price level is likely to slow the physical demand for Gold, Commerzbank's Commodity Analyst Barbara Lambrecht notes.
New
update2024.09.27 20:32

USD/CHF Price Prediction: Unfolding down leg within range

USD/CHF continues trading up and down within a range. It is probably in a sideways trend, which given the principle that "the trend is your friend" is likely to endure.
New
update2024.09.27 20:26

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

arw
  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Line

Line
Facebook

Facebook
X

Twitter
Cancel