- EUR/GBP edges lower to approximately 0.8650 on Thursday at the beginning of the European meeting.
- The tariff uncertainty between the US and the EU is undermined by the euro against the pound of the Sterling.
- Increasing market anxiety about the debt position in the UK could help reduce EUR/GBP losses.
The EUR/GBP Cross loses the land of almost 0.8650 and captures a four -day winner during the first European meeting on Thursday. HCOB messages and composed reports of PMI from Germany and Euro area They will be the peak later on Thursday.
Inflation in the edges of the euro area in June hit the European Central Bank (ECB) and increases the expectations that politicians will leave a key interest rate unchanged at the end of this month. Financial markets forecast One more ECB Reducing a rate to 1.75% by the end of the year, followed by a stable rate before potential hikes around the end of 2026.
Last week, the US submitted a new proposal for the European Union (EU) negotiating team. European negotiators will meet their American officials at the end of this week and hope to achieve an agreement in the coming days. European officials expect a business interview update on Friday, but the situation remains upset. The uncertainty of the business tariff between US President Donald Trump and the euro area could have suppressed sentiment in the near future and in the near future to drag shared currency.
On the other hand, the British bonds had the largest sale since October 2022 and Pound (GBP) faces some sales pressure after the UK government sharply reduced the plans back to reduce the benefits. The recent market response reflects market concerns about the credibility of the government to reduce fiscal deficits. Increasing market anxiety over the British debt position could be considered on GBP in the near future and create for the main pair of tail.
“It’s not just a British pound that is sharply lower, but also sows are also under great pressure. I think it’s just a crisis of trust in the Labor government,” said Marc Chandler, the main market strategist of Bannockburn Global Forex LLC.
Pound sterling faqs
Libra Sterling (GBP) is the oldest currency in the world (886 NL) and the official currency of the United Kingdom. It is the fourth most popular unit for foreign exchange (FX) in the world, which is 12% of all transactions, according to data 2022 on average $ 630 billion a day. Its key pairs of trading are GBP/USD, also known as a “cable” that represents 11%FX, GBP/JPY or “dragon”, as merchants (3%) and EUR/GBP (2%). The pound of Šterlinky is issued by the Bank of England (BOE).
The only most important factor affecting the value of the pound of ŠTERLINKů is the monetary policy that Bank of England Bank of England. Boe sets up its decisions on whether it has achieved its primary goal of “price stability” – a stable inflation rate of approximately 2%. Its primary tool for achieving this is to adjust interest rates. If inflation is too high, the Boe will try to increase the increase in interest rates again, which will be more expensive for people and businesses. This is generally positive for GBP, because higher interest rates make the United Kingdom an more attractive place for global investors to park their money. When inflation drops too low, it is a sign that economic growth slows down. In this scenario, the BOE will consider a reduction in interest rates to cheaper the loan, so businesses borrow more to invest in projects creating growth.
It relaxes to measure the health of the economy and affect the pound of pounds. Indicators such as GDP, production and services of PMI and employment can affect the direction of GBP. The strong economy is good for sterling. Not only does it attract more foreign investments, but it can encourage BOE to set interest rates directly strengthening GBP. Otherwise, if the economic data is weak, the pound of Šterlinky is likely to drop.
Another significant release of Data for Libra Sterling is a business balance. This indicator measures the difference between what the country earns from its exports and what they spend on imports in the given period. If the country creates a highly sought -after export, its currency will benefit purely from further demand created from foreign buyers trying to buy these goods. Therefore, a positive net business balance strengthens the currency and vice versa for a negative balance.
