The British book continued its victory sequence on Tuesday, going to $ 1.342 against the US dollar – it is a strongest level since September.
Sterling has increased against the dollar in the last 10 days, winning about six hundred since early April. If he displays an 11th gain today, it will be the longest series of daily increases since 1971, said Bloomberg.
The push occurs while the US dollar is weakening in the midst of increased political pressure on the federal reserve.
The markets reacted strongly to the renewed attacks by former president Donald Trump, who intensified his calls for interest rates and referred to the efforts to withdraw the president of the Fed, Jerome Powell.
Trump’s comments have rekindled investors’ concerns concerning the independence of the Central Bank and added new layers of uncertainty to an already fragile global perspective.
Trump renews the pressure on Powell on monetary policy
Copy the link to the section
Trump was unleashed on Powell on Monday for his continuous position “wait and see” on monetary relaxation, warning that not reducing rates could trigger an economic slowdown.
Writing on verification, Trump said: “There may be a slowdown in the economy unless Mr. Lost loser does not reduce interest rates now.”
The remarks followed a previous threat to dismiss Powell, with Trump saying: “I am not satisfied with him. If I want him from there, he will be very quickly, believe me.”
Rhetoric has alarmed investors and economists, many of which consider the independence of the Central Bank as a cornerstone of financial stability.
The US dollar index (DXY), which follows the greenback against six large peers, fell to a three -year hollow almost 98.00 Tuesday.
Analysts claim that the fall in the dollar reflects in -depth concerns that the Fed could be subject to premature rate reductions, potentially destabilizing the financial markets.
Speculation goes on the next Powell movement
Copy the link to the section
Although a drop in the emergency rate remains unlikely, analysts are looking closely at the Fed’s response.
Francesco pesole, FX strategist at ING Think, noted that “there is a good chance that Trump is not – or will not be able to take drastic measures, and Powell will hold his land.”
However, the weigh added that the political pressure could intensify, in particular given the foreseen economic data forecasts.
The Ois Curve continues price in a minimum of chances of a rate drop in May.
Nevertheless, traders remain cautious, in particular in the light of Trump’s recent attempts to blame a potential economic slowdown on the Fed – a signal, according to some, that the administration recognizes the risks of imminent recession.
British perspectives are obscured by global tensions and gentle inflation
Copy the link to the section
While Sterling has won over the weakness of the dollar, its wider performance remains mixed in the midst of increasing concerns concerning the economic direction of the United Kingdom.
The Bank of England (BOE) faces increasing pressure to adjust its monetary policy as inflation data is cooling and the change in international trade dynamics.
Data on the Consumer Price Index (ICC) of the United Kingdom for Mars came milder than expected, the inflation of services increasing by 4.7% – compared to 5% of February.
Moderation has fueled expectations that the BOE could consider a drop in rate at its May meeting, in particular as larger global economic tensions are intensifying.
Adding to complexity is an increase in commercial friction.
Trump taxation of reciprocal prices of 10% and 25% of samples from steel and foreign cars has aroused fears that British exporters can face more fierce competition while the displaced goods flood other markets.
The BOE financial policy committee warned last month that major changes in the world trade agreements could weaken financial stability by hampering growth.
BO political decision -makers divided on the risks of inflation
Copy the link to the section
Boe’s political decision -makers, Megan Greene, addressing Bloomberg TV on Tuesday, recognized that if the inflation of services remains a concern, prices are likely to be disinflationary in fact.
“Prices actually represent more a disinflationist risk than an inflationary risk,” she said, adding that there is no significant stressful sign in the labor market.
At the same time, some market players have started at prices in the probability of a rate drop in the United Kingdom, especially since the employer’s higher contributions to Social Security take effect and that the activity of employment is slows.
Technical analysis: Pound Sterling contains gains almost 1,3400
Copy the link to the section
In the short term, the attention of investors will turn to the publication of preliminary data of the S&P Global / CIPS purchase managers for April, as well as retail figures in the United Kingdom for March, due later this week.
The two data sets will be closely monitored for signs of economic resilience or weakness that could influence the decision of the BOE.
On the technical fronts, the GBP / USD pair continues to show a strong bullish dynamic, with all the exponential means of displacement in short-time, according to the analysts of FXSTREET.
Source: FXSTREET
The relative force index of 14 days has exceeded 70, suggesting over -racket conditions and increasing the possibility of short -term correction, analysts said.
However, with the pressure dollar and the global markets on the edge, Sterling could extend its gains to the psychological level of 1,3500.
Support is expected towards the most of April 3 of 1,3200, offering an increase in the volatility of the cushion in response to data surprises or other political developments of Washington.
In the meantime, traders are preparing for high currency market fluctuations while the interaction of political rhetoric, speculation on monetary policy and global economic signals continue to stimulate feeling.
