Select Language

GBP/USD drops to near 1.2600 ahead of UK labor market data

blockHeadVisual
  1. HOME
  2. Get information
  3. World FX news
  4. GBP/USD drops to near 1.2600 ahead of UK labor market data

World FX news

search
Breaking news

GBP/USD drops to near 1.2600 ahead of UK labor market data

  • X
  • facebook
  • LINE
  • RSS
  • X
  • facebook
  • LINE
  • RSS
New update 2025.02.18 13:25
GBP/USD drops to near 1.2600 ahead of UK labor market data

update 2025.02.18 13:25

  • GBP/USD declines ahead of UK labor data set to be released on Tuesday.
  • UK PM Starmer said that any peace agreement for Ukraine would need a "US backstop" to deter further Russian attacks.
  • Fed Governor Michelle Bowman warned that upside inflation risks persist, stressing the need for more clarity before considering rate cuts.

GBP/USD breaks its five-day winning streak, trading around 1.2600 during Tuesday's Asian session. Traders are awaiting UK employment data set to be released later in the day. The Claimant Count Change for January is expected to rise to 10K new unemployment benefit claimants, up from the previous 0.7K. The ILO Unemployment Rate is also forecast to increase to 4.5% from 4.4%.

British Prime Minister Keir Starmer stated on Monday that any peace deal for Ukraine would require a "US backstop" to prevent Russia from attacking again, according to Reuters. Starmer emphasized that Ukraine's future is a crucial issue for Europe, and it is urgent for Europe to share the responsibility in addressing the situation.

The downside risk for the GBP/USD pair could be linked to the strengthening US Dollar as Treasury yields rise. The US Dollar Index (DXY), which tracks the USD against six major currencies, edges higher after losing ground in the previous three sessions, trading around 106.90. At the same time, 2-year and 10-year US Treasury yields stand at 4.27% and 4.51%, respectively.

Federal Reserve Governor Michelle Bowman remarked on Monday that rising asset prices may have slowed the Fed's progress on inflation. While she expects inflation to decline, she warned that upside risks persist and stressed the need for more certainty before considering rate cuts.

Meanwhile, Fed Governor Christopher Waller acknowledged on Monday that while inflation has improved, progress has been "excruciatingly" slow. Waller emphasized the importance of not letting policy uncertainty hinder data-driven decisions.

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.

 

Date

Created

 : 2025.02.18

Update

Last updated

 : 2025.02.18

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

FX option expiries for Feb 18 NY cut

Next article

India Gold price today: Gold rises, according to FXStreet data

prev

Most viewed

US Dollar steadies after geopolitical volatility

The US Dollar Index (DXY), which measures the US Dollar's (USD) performance against a basket of six major currencies, recovers on Monday after an initial downturn, stabilizing around 106.50.
New
update2025.02.25 03:33

Mexican Peso tumbles as inflation and weak growth supports Banxico rate cuts

The Mexican Peso (MXN) slipped against the US Dollar (US) for the second consecutive day after inflation data for the first half of February rose as expected, yet justified Banco de Mexico's (Banxico) latest 50 basis points (bps) rate cut.
New
update2025.02.25 03:29

President Trump: Trying to work on 'economic development' with Russia

US President Donald Trump hit newswires on Monday, passing along comments on the ongoing Ukraine-Russia peacemaking situation.
New
update2025.02.25 03:25

Dow Jones Industrial Average looks for recovery after last week's confidence splashdown

The Dow Jones Industrial Average (DJIA) recovered some ground on Monday, climbing some 300 points and change at its peak in an effort to claw back some of last week's losses sparked by an unexpected downturn in consumer confidence figures.
New
update2025.02.25 02:36

GBP/USD holds firm after hitting 9-week high

The Pound Sterling remains firm against the Greenback during the North American session on Monday yet retraced earlier gains after hitting a 9-week high of 1.2690 amid some US dollar weakness.
New
update2025.02.25 01:13

EUR/USD Price Analysis: Bulls struggle as pair retreats from 100-day SMA

The EUR/USD pair started the week on a cautiously positive note, climbing toward recent highs before encountering strong resistance near the 100-day Simple Moving Average (SMA).
New
update2025.02.25 01:12

Gold price hits all-time high at $2,956 as trade uncertainty lingers

Gold's price rose to a new record high of $2,956 in early trading on Monday during the North American session as the Greenback stayed firm and US yields remained virtually unchanged.
New
update2025.02.24 23:24

USD/JPY aims to extend upside to near 150.00 as Yen weakens across the board

The USD/JPY pair advances to near 149.80 in North American trading hours on Monday.
New
update2025.02.24 22:34

US Dollar in whipsaw move as traders assess German election results

The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, recovers the nearly 0.50% loss it incurred in the opening hours in the Asian markets and trades flat near 106.60 at the time of writing on Monday.
New
update2025.02.24 21:35

AUD/USD falls back from 0.6400 as US Dollar bounces back

The AUD/USD pair pares gains after rising to near 0.6400 in late European trading hours on Monday.
New
update2025.02.24 21:22

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