Articles
WTI moves below $80.00 due to a surprise build in US crude stockpiles
398588 June 27, 2024 16:29 FXStreet Market News
- WTI price loses ground as a surprise build on US crude stockpiles raised concerns about weakening demand.
- US EIA Crude Oil Stocks Change increased by 3.591 million barrels in the previous week, against an expected decline of 3.000 million barrels.
- US crude Oil imports reached 3.1 million barrels per day in May, the highest since July 2022.
West Texas Intermediate (WTI) crude Oil price edges lower to near $80.30 during the Asian session on Thursday, retreating further from a two-month high of $81.65. Crude Oil prices received pressure after a surprise build in US crude stockpiles raised concerns about weakening demand in the worldÂ’s top Oil consumer.
On Wednesday, US Energy Information Administration data showed that US Crude Oil Stocks Change increased by 3.591 million barrels in the week ending June 21, defying market expectations for a 3.000 million-barrel decline.
Ongoing geopolitical tensions in the Middle East and Ukraine could further fuel the prices of the Oil prices. Israeli Prime Minister Benjamin Netanyahu has stated that the most “intense” phase of the attack against Hamas in Gaza is nearing its end, according to CNN. Meanwhile, Russia has condemned the US for a “barbaric” strike in Crimea, which utilized US-provided missiles, resulting in the deaths of at least four people, including children, and injuring 151 others, per NBC News.
However, last month, US crude Oil imports surged to their highest level in nearly two years, driven by refiners acquiring heavy crudes from Canada and Latin America to produce fuels for the summer driving season. In May, US crude Oil imports reached 3.1 million barrels per day (bpd), the highest since July 2022, according to ship tracking service Kpler. So far this month, imports have remained robust, averaging around 2.9 million bpd, as reported by Reuters.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. APIÂ’s report is published every Tuesday and EIAÂ’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
EUR/USD: A break below 1.0640 to lead to further decline – UOB Group
398587 June 27, 2024 16:26 FXStreet Market News
The Euro (EUR) could decline further, but it is not clear for now if it can break the significant support level at 1.0640. But if it breaks below this level, a sustained EUR decline is possible.
EUR to stabilize above 1.0730
24-HOUR VIEW: “Two days ago, EUR fell to 1.0689 and then rebounded. Yesterday, we pointed out that ‘there has been a slight increase in momentum.’ We indicated that EUR ‘could dip below the 1.0689 low, but the major support at 1.0670 is unlikely to come under threat.’ The anticipated decline exceeded our expectations as EUR fell to a low of 1.0664. Today, EUR could decline further, but it is not clear for now if it can break the significant support level at 1.0640. Note that 1.0665 is still a rather strong support level. Resistance is at 1.0695; a breach of 1.0710 would mean that the weakness in EUR has stabilised.”
1-3 WEEKS VIEW: “Our latest narrative was from two days ago (25 Jun, spot at 1.0730), wherein EUR ‘has likely entered a consolidation phase and it is likely to trade between 1.0670 and 1.0800.’ Yesterday, EUR fell to a low of 1.0664. Downward momentum is building again, but at this stage, it does not appear to be enough to suggest the start of a sustained decline. Furthermore, there is a significant support level at 1.0640. That said, provided that 1.0730 is not breached, EUR is likely to remain under pressure, but a sustained decline is likely only if it can break clearly below 1.0640.”
Full Article
Gold price consolidates the downside as focus shifts to US PCE inflation
398586 June 27, 2024 16:09 FXStreet Market News
- Gold price attempts a minor recovery from a two-week low set on Wednesday.
- The FedÂ’s hawkish stance, higher US bond yields, and recent USD strength have acted as a headwind.
- Geopolitical tensions and political uncertainty help limit the downside for the safe-haven metal.
Gold price (XAU/USD) holds near two-week lows, strugging to register any meaningful recovery while trading around the $2,300 mark in the European session on Thursday. The Federal Reserve (Fed) adopted a more hawkish stance at the end of the June meeting. Furthermore, policymakers continue to argue in favor of only one interest rate cut by the end of this year. This remains supportive of elevated US Treasury bond yields and turns out to be a key factor acting as a headwind for the non-yielding yellow metal.Â
That said, signs of easing inflationary pressures in the US keep bets for a September interest rate cut by the Fed on the table and fail to assist the US Dollar (USD) to capitalize on the previous day’s strong move up to a nearly two-month peak. This, along with a softer tone around the equity markets, persistent geopolitical tensions and political uncertainty lend some support to the safe-haven Gold price. Traders also seem reluctant ahead of the key US macro data, with the focus squarely on the US Personal Consumption Expenditures (PCE) Price Index on Friday.
Daily Digest Market Movers: Gold price struggles amid Fed rate-cut uncertainty
- The Federal Reserve’s higher-for-longer interest rates narrative remains supportive of elevated US Treasury bond yields and a bullish US Dollar, which undermines the non-yielding Gold price.
- A government report published on Wednesday showed that New Home Sales registered the steepest decline since September 2022 and plunged 11.3% in May to 619K, or the lowest level since November.
- The USD bulls, however, seem rather unaffected by the data, which added to the evidence that the world’s largest economy is slowing down amid the recent signs of easing inflationary pressures.Â
- The Fed projected only one rate cut in 2024, though the markets are still pricing in a greater chance of the first rate cut by the Fed in September and about two 25 basis points cuts by the year-end.Â
- The uncertainty over the likely timing and the number of Fed rate cuts this year keeps a lid on any further USD appreciation and lends support to the XAU/USD amid persistent geopolitical tensions.
- Traders also seem reluctant ahead of the US presidential debate and the release of the US Personal Consumption Expenditures (PCE) Price Index – the Fed’s preferred inflation gauge – on Friday.
- Heading into the key data risk, Thursday’s US macro data – the final Q1 GDP print, Durable Goods Orders, Initial Weekly Jobless Claims, and Pending Home Sales – might provide some impetus.
Technical Analysis: Gold price manages to hold above $2,285 support, not out of the woods yet
From a technical perspective, the recent failure to build on the momentum beyond the 50-day Simple Moving Average (SMA) and the subsequent downfall favors bearish traders. Moreover, the overnight breakdown through a short-term ascending trend-line support near the $2,314 area validates the near-term negative outlook. Given that oscillators on the daily chart have been gaining negative traction, some follow-through selling below the $2,285 horizontal support has the potential to drag the Gold price to the 100-day SMA support near the $2,250 area. The downward trajectory could extend further towards the $2,225-2,220 region before the XAU/USD eventually drops to the $2,200 round-figure mark.
On the flip side, any attempted recovery now seems to face resistance near the $2,314-2,315 support breakpoint. A sustained strength beyond might trigger a short-covering rally, though is likely to remain capped near the 50-day SMA, currently pegged near the $2,338-2,340 region. The subsequent move-up could lift the Gold price back to the $2,360-2,365 supply zone, which, if cleared decisively, will negate any near-term negative bias. Bullish traders might then aim to reclaim the $2,400 round-figure mark and challenge the all-time peak, around the $2,450 area touched in May.
Gold FAQs
Gold has played a key role in humanÂ’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesnÂ’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a countryÂ’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Eurozone M3 Money Supply (YoY) came in at 1.6%, above expectations (1.5%) in May
398585 June 27, 2024 16:05 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Full Article
Eurozone Private Loans (YoY) meets forecasts (0.3%) in May
398584 June 27, 2024 16:05 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Full Article
Italy Business Confidence came in at 86.8, below expectations (88.7) in June
398582 June 27, 2024 16:02 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Full Article
Italy Consumer Confidence above expectations (97) in June: Actual (98.3)
398581 June 27, 2024 16:02 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Full Article
Silver Price Forecast: XAG/USD drops toward $28.50 due to bearish bias
398579 June 27, 2024 15:51 FXStreet Market News
- Silver price may extend losses as daily chart analysis indicates a bearish bias.
- The XAG/USD pair consolidates within the descending channel pattern.
- The 14-day RSI suggests that Silver price trades within a range between $29.70-$28.70.
Silver price (XAG/USD) continues its losing streak for the third successive session, trading around $28.70 per troy ounce during the early European session on Thursday. An analysis of the daily chart indicates a bearish bias as the XAG/USD pair consolidates within the descending channel pattern.
The momentum indicator Moving Average Convergence Divergence (MACD) indicates the strengthening of bearish bias for Silver. This configuration indicates that the overall trend turns negative as the MACD line breaks below the centreline and a signal line.
The 14-day Relative Strength Index (RSI) is consolidating below the 50 level, suggesting Silver price trading within a range between $29.70-$28.70. If the RSI declines below the 30 level, it generates buy signals and indicates an oversold condition of the commodity asset.
On the downside, the Silver price may find key support around the psychological level of $28.00. A break below this level could exert pressure on the XAG/USD pair to approach the vicinity around the lower threshold of the descending channel around the level of $27.50.
In terms of resistance, the Silver price may find the immediate barrier around the nine-day Exponential Moving Average (EMA) at $29.30, followed by the significant level of $30.00.
A breakthrough above the latter could lead the price of the grey metal to reach the upper boundary of the descending channel around the level of $30.50. A breakthrough above the latter could lead the XAG/USD pair to test the four-week high of $31.55.
XAG/USD: Daily Chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold’s. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold’s moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Sweden Riksbank Interest Rate Decision remains unchanged at 3.75%
398578 June 27, 2024 15:33 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Full Article
Pound Sterling broadly steadies as traders turn focus towards US core PCE inflation
398576 June 27, 2024 15:29 FXStreet Market News
- The Pound Sterling rises slightly against the US Dollar but the overall direction remains uncertain.
- Economists expect that the US core PCE inflation softened in May.
- The uncertainty over the UK elections outcome keeps the Pound Sterling on its toes.
The Pound Sterling (GBP) finds a cushion above the round-level support of 1.2600 against the US Dollar (USD) in ThursdayÂ’s London session. The GBP/USD pair gauges ground as the US Dollar registers a modest correction. The US Dollar Index (DXY), which tracks the GreenbackÂ’s value against six major currencies, edges down after posting a fresh eight-week high near 106.10.
However, the near-term outlook of the US Dollar remains firm as investors are expected to trade cautiously ahead of the United States (US) core Personal Consumption Expenditure price index (PCE) data for May, which will be published on Friday. Core PCE inflation, the Federal ReserveÂ’s (Fed) preferred inflation measure, is estimated to grow at a slower pace of 0.1% against 0.2% in April month-on-month. Annually, the underlying inflation is projected to decelerate to 2.6% from 2.8% in April.
A scenario in which PCE inflation declines, as economists expect, would boost expectations for the Fed to begin reducing interest rates from September. According to the CME FedWatch tool, traders see a 62.3% that interest rates will be reduced from their current levels. The tool also shows that the Fed will cut interest rates twice this year. However, Fed policymakers signaled in their latest dot plot that there will be only on rate cut this year.
In ThursdayÂ’s session, investors will focus on the Initial Jobless Claims data for the week ending June 21, the revised Q1 Gross Domestic Product (GDP) estimates, and Durable Goods Orders data for May.
Daily digest market movers: Pound Sterling weakens against Asian peers
- The Pound Sterling gains against its European peers and the US Dollar but is exhibiting weakness against Asian currencies in ThursdayÂ’s European session. In Asia, the Japanese Yen (JPY) rises as fears of JapanÂ’s intervention in the FX domain have intensified. Meanwhile, antipodean currencies are showing strength as investors expect that the Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ) will not pivot to policy normalization this year.
- The British currency is expected to face volatility as the United Kingdom (UK) parliamentary elections are held on July 4. According to polls, UK Prime Minister Rishi SunakÂ’s Conservative Party is expected to suffer a defeat from the opposition Labour Party.Â
- On the economic front, the deteriorating economic outlook due to the Bank of England’s (BoE) higher interest rates and stubborn wage growth keep policymakers concerned. The preliminary S&P Global/CIPS Purchasing ManagersÂ’ Index (PMI) for June showed that business activity in the manufacturing sector expanded at a faster pace, while operations in the service sector unexpectedly slowed. Meanwhile, high wage growth continues to empower individuals with high purchasing power, making it more difficult for policymakers to kick-start the policy-easing cycle.
- Financial markets expect the BoE to start reducing interest rates from the August meeting. Meanwhile, investors will focus on the revised UK Q1 GDP estimates, which will be published on Friday.
Pound Sterling Price Today:
British Pound PRICE Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the US Dollar.
| Â | GBP | USD | EUR | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| GBP | Â | 0.16% | 0.03% | -0.02% | 0.06% | -0.11% | -0.01% | 0.11% |
| USD | -0.16% | Â | -0.13% | -0.21% | -0.11% | -0.30% | -0.19% | -0.05% |
| EUR | -0.03% | 0.13% | Â | -0.10% | 0.00% | -0.17% | -0.09% | 0.06% |
| JPY | 0.02% | 0.21% | 0.10% | Â | 0.12% | -0.08% | -0.00% | 0.17% |
| CAD | -0.06% | 0.11% | -0.01% | -0.12% | Â | -0.21% | -0.09% | 0.04% |
| AUD | 0.11% | 0.30% | 0.17% | 0.08% | 0.21% | Â | 0.11% | 0.22% |
| NZD | 0.01% | 0.19% | 0.09% | 0.00% | 0.09% | -0.11% | Â | 0.13% |
| CHF | -0.11% | 0.05% | -0.06% | -0.17% | -0.04% | -0.22% | -0.13% | Â |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Technical Analysis: Pound Sterling finds temporary support near 1.2600
The Pound Sterling finds interim support near 1.2600 against the US Dollar. The GBP/USD pair has come under pressure after breaking below the crucial support of 1.2700. The Cable declines toward the 200-day Exponential Moving Average (EMA), which trades around 1.2590.Â
The Cable has dropped below the 61.8% Fibonacci retracement support at 1.2667, plotted from the March 8 high of 1.2900 to the April 22 low at 1.2300.
The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, indicating consolidation ahead.
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, aka ‘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.