26.02.2024 12:20 PM
Rise in global risk appetite serves GBP/USD well and truly

The pound took advantage of its status as a risk currency and, watching the rapid rally of global stock indices led by the Americans, closed the first week in the green since mid-January. Thanks to positive corporate reports from chip manufacturer NVIDIA, new record highs were set in the American, European, and even Japanese stock markets. The Japanese market needed 34 years to update its historical peak! However, to continue the GBP/USD rally, it would be good to use its own resources as well.

Seemingly, positive business activity statistics in the UK contribute to this. The composite purchasing managers' index (PMI) soared to the highest level in nine months in February, soothing the wounds of GBP/USD bulls. The rise in PMI is facilitated by the recovery of real household incomes and more favorable financial conditions than before.

Business Activity Dynamics in the UK

This image is no longer relevant

Positive business activity dynamics allowed pound enthusiasts to recover from the shock associated with the fact that the UK economy slipped into a recession in the second half of 2023. However, BoE Governor Andrew Bailey stated before Parliament that it was a very minor economic downturn. It is unlikely to continue and trigger a rate cut in the repo rate earlier than the markets currently expect.

Derivatives give a 50% chance of the Bank of England starting monetary expansion in June. However, they are 100% confident that the ECB and the Fed will take their first steps in this month. The BoE's sluggishness plays in favor of the pound. It is precisely because of this that the British pound is the main competitor to the U.S. dollar in the currency race of the Big Ten.

At the same time, based on one PMI report, it cannot be said that the UK economy has emerged from the woods, declared the end of the recession, and will steadily grow. On the contrary, the path to recovery is not easy. This is evidenced by the first decline in British consumer sentiment in four months. Before that, the indicator was at a two-year high. Perhaps, in the face of high inflation, early optimism is waning.

This image is no longer relevant

The successes of GBP/USD could have been more significant if Federal Reserve officials had not tried to shift expectations for the start of monetary expansion to a later period. Federal Reserve Vice Chair Philip Jefferson and New York Fed President John Williams expressed that it is not worth raising the federal funds rate before the end of the year. If the market follows them and shifts expectations from June to September or even later, the U.S. dollar may win the currency race of the Big Ten in 2024.

Technically, on the daily chart of GBP/USD, an inside bar with a long lower shadow was formed. Breaking its low at 1.2645 could be the basis for selling the pound against the U.S. dollar. On the contrary, a successful assault on resistance at 1.27 will allow traders to increase the long positions formed earlier from the level of 1.2635.

Jana pendapatan melalui perubahan kadar mata wang kripto dengan InstaForex.
Muat turun MetaTrader 4 dan buka dagangan pertama anda.
  • Grand Choice
    Contest by
    InstaForex always strives to help you
    fulfill your biggest dreams.
  • Chancy Deposit
    Deposit akaun anda sebanyak $3,000 dan dapatkan $9000 lebih lagi!
    Dalam Mei kami membuat cabutan bertuah $9000 dalam Kempen Chancy Deposit!
    Dapatkan peluang untuk menang dengan membuat deposit $ 3000 ke dalam akaun dagangan. Setelah memenuhi syarat ini, anda menjadi peserta kempen.
  • Trade Wise, Win Device
    Daftar untuk peraduan dan tambah dana akaun anda dengan sekurang-kurangnya AS$ 500 untuk layak memenangi peranti mudah alih.
  • Bonus 100%
    Peluang istimewa anda untuk menerima bonus 100% pada deposit anda
  • Bonus 55%
    Dapatkan bonus 55% pada setiap deposit anda
  • Bonus 30%
    Dapatkan bonus 30% setiap kali anda membuat penambahan dana akaun anda

Artikel yang dicadangkan

Tidak boleh bertanya sekarang?
Tanya soalan anda di Ruangan bersembang.
Panggilan semula Widget