Created
: 2025.01.03
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
GBP/USD plunges to new lows to kick off the new trading year
World FX news
Breaking news
GBP/USD plunges to new lows to kick off the new trading year
New
2025.01.03 08:16
2025.01.03 08:16
2025.01.03 08:16
- GBP/USD soured on Thursday, dipping below 1.2400 for the first time since April.
- January just started but Cable is already on pace to end the month on a sour note.
- US PMI figures on Friday will round out the week's economic calendar.
GBP/USD struck a soft chord on Thursday, dumping over one percent on the outset of the new trading season and piercing through the 1.2400 handle for the first time in almost ten months. Market volumes remain thin following the midweek New Year's holiday, but the orders coming through are on a decidedly risk-off stance.
Economic data on the UK side remains strictly low-tier through the remainder of the first trading week of 2025, leaving Cable traders to grapple with a fresh update in US Purchasing Managers Index (PMI) figures slated for Friday. UK Money Supply and Mortgage Approvals are due to release early Friday as well, but the low-impact figures are unlikely to move the markets.
US ISM Manufacturing PMI survey results for December are expected to hold steady, forecast to print at a contractionary 48.4, in line with the preliminary reading. Despite a slight uptick MoM, US businesses continue to have a tepid outlook on activity in the first quarter of 2025 as domestic demand cools off.
The key takeaway for Cable traders will be the rate differential through the first half of 2025. The Federal Reserve (Fed) is slated to deliver far fewer rates cuts through the year than previously expected. The Fed itself only expects to deliver a total of two 25 bps rate trims through 2025, as noted in the US central bank's Summary of Economic Projections (SEP) in December.
GBP/USD price forecast
GBP/USD took a fresh leg lower, falling back below 1.2400 and the pair is poised for a further plunge back into the 1.2300 handle. The 50-day Exponential Moving Average (EMA) is accelerating into the bearish side below 1.2700 after crossing through the long-run 200-day EMA near 1.2780, which will put further downside pressure on price action in the near term.
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, also known as '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.
Last updated
: 2025.01.03
Related articles
GBP/USD catches a thin rebound on Friday
2025.01.04 02:55Fed's Barkin: We must see inflation at 2% or weakening in demand to cut rates.
2025.01.04 02:40US ISM Manufacturing PMI improves to 49.3 in December vs. 48.4 expected
2025.01.04 00:06AUD/USD consolidates around 0.6200 ahead of US ISM Manufacturing PMI
2025.01.03 23:31GBP/USD retains a soft undertone - Scitabank
2025.01.03 22:54EUR/USD: Upside potential is limited - Scotiabank
2025.01.03 22:52
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?
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.
Most viewed
Gold Price Forecast: XAU/USD eases on Friday as investors look elsewhere
XAU/USD dipped on Friday, with Gold prices falling roughly two-thirds of a percent and dipping back below $2,650 per ounce as market sentiment recovers from the early week's risk-off appetite.
New
2025.01.04 03:17GBP/USD catches a thin rebound on Friday
GBP/USD found a thin recovery on Friday, gaining roughly four-tenths of one percent and ending the first trading week of 2025 back above the 1.2400 handle.
New
2025.01.04 02:55Fed's Barkin: We must see inflation at 2% or weakening in demand to cut rates.
Federal Reserve (Fed) Bank of Richmond President Tom Barkin delivered prepared remarks to the Maryland Bankers Association in Maryland on Friday, outlining the Fed's case for when to cut rates again, and the conditions required to do so.
New
2025.01.04 02:40US ISM Manufacturing PMI improves to 49.3 in December vs. 48.4 expected
The business activity in the US manufacturing sector continued to contract, albeit at a softening pace in December, with the ISM Manufacturing PMI rising to 49.3 from 48.4 in November.
2025.01.04 00:06AUD/USD consolidates around 0.6200 ahead of US ISM Manufacturing PMI
The AUD/USD pair trades sideways around 0.6200 in Friday's North American session.
2025.01.03 23:31GBP/USD retains a soft undertone - Scitabank
UK money supply and lending data for November came in on the weak side of expectations. Softer demand for mortgages suggests the rebound in UK house prices is starting to crimp demand, Scotiabank's Chief FX Strategist Shaun Osborne notes.
2025.01.03 22:54EUR/USD: Upside potential is limited - Scotiabank
The Euro (EUR) has recovered a little from new cycle lows near 1.0240 made yesterday against the US Dollar (USD) but the rebound has stalled below 1.03 so far on the session, Scotiabank's Chief FX Strategist Shaun Osborne notes.
2025.01.03 22:52CAD holds consolidation range around 1.44 - Scotiabank
The CAD is little changed on the session and continues to hold in the trading range established prior to the holiday break, Scotiabank's Chief FX Strategist Shaun Osborne notes.
2025.01.03 22:49DXY: Overvalued USD consolidates - Scotiabank
After a solid start to the year yesterday, broad dollar gains have been checked back somewhat, leaving the Dollar Index (DXY) in consolidation mode into the weekend, Scotiabank's Chief FX Strategist Shaun Osborne notes.
2025.01.03 22:44NZD/USD Price Forecast: Gains ground near 0.5600
The NZD/USD pair gains firm-footing near the round-level support of 0.5600 in Friday's North American session.
2025.01.03 22:42Disclaimer:
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.
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
