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The slowdown in the British economy, caused by the American definitions, drives the Bank of England to reduce interest rates. However, this is not the only issue that affects the GBPUSD pair. The US Securities Market is the most disturbing GBPUSD Bulls. Let’s discuss this topic and develop a trading plan.
The article covers the following topics:
Main meals
- The Bank of England will reduce the ribau rate to 4.25 %.
- The United States and the United Kingdom concluded a commercial deal.
- The S& P 500 refund negatively affects the British pound.
- Consider short deals if the GBPUSD pair decreases less than 1.326.
Weekly basic expectations for Bound Steling
Will the Bank of England focus on stimulating the economy or remaining cautious amid the current trade uncertainty? All 32 Bloomberg experts predict a reduction in the ribau rate from 4.5 % to 4.25 % at the May 8 meeting, as 20 of them expected that at least one member of MPC defend 50 points per second. Mashqat market is in line with this view, as it predicts four rounds of monetary policy in 2025, including in May and June.
England bank expectations rate
Source: Bloomberg.
The Bank of England is unlikely to reflect the decision of the Federal Reserve, as the latter plans to keep it stopping in the cash mitigation course. However, the two countries face different economic conditions. If the American attacks are by raising the tariff, the UK is forced to defend itself. While the main concern of the United States is the risk of high inflation, the UK faces the threat of slowdown in GDP.
It is not surprising that the differences in economic growth and monetary policy are emerging, which may get rid of the theory. GBPUSD husband. In fact, the yield of bonds in the UK are higher than the yield of the United States, but the expectations for reducing the ribau rate narrowing the difference, causing the decline of the British pound.
Perform bond returns
Source: Bloomberg.
If the central banks respond to the US administration when deciding on prices, the markets must do the same. Donald Trump’s announcement of a deal with a “large and respectful country” is to preserve GBPUSD A pair of finishing now.
It is believed that Trump’s statement refers to Britain. According to A Wall Street Journal Insider, the tariff will remain by 10 % in effect in effect, but the UK will be granted 25 % exemption on the definitions applied to aluminum, steel and cars imports. On the other hand, the UK will reduce the digital services tax on American technology companies. As a result, the agreement will reduce pressure on British exporters in the financing, energy and cars sectors.
Will this development affect the British pound? It seems that the initial momentum that follows the news has faded, has lost FTSE 100 steam gains. Recently, the UK’s stock index has been suffering from twice the S&P 500. If this trend continued, it is possible that the GBPUSD pair will face a correction.
Stock indicators trends
Source: Bloomberg.
Forex exchange rates are related to capital flows, which are mainly affected by American protectionism instead of monetary policy, the continuous increase in the US stock market put pressure on the British pound against the US dollar.
GBPUSD weekly trading plan
if GBPUSD The pair is drowned under 1.326 support, one can think about selling in the short term. However, cooling the American economy and the increasing likelihood of the Federal Reserve Reserve for the price reduction cycle will soon resume or later the bullish trend in the husband. This indicates that the husband’s capabilities to correct deeper are limited.
This expectation depends on an analysis Basic factorsIncluding official data from financial institutions and organizers, various geopolitical and economic developments, and statistical data. Historical market data is also.
GBPUSD price scheme in real time
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