empty
InstaForex Loprais Team - Official participant of the Dakar rally
InstaForex Loprais Team - Official participant of the Dakar rally
This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.
Start as Beginner
How to start trading
Useful information
Training and recordings
InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.
Become Investor
PAMM System
ForexCopy System
Passive investments
Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.
Become Partner
Main Page
Partner Area
Advantages for Affiliates
Registration
This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.
All Promo Campaigns
Bonuses
Contests
Events
Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.
Full details
Forums
We are in social networks
Forex humour
Forex Portal
InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.
Learn More
History
Why Choose Us
InstaSport
Regulation
Company News
Awards
InstaForex Stars
InstaForex Offline
Headquarters
Key documents
Social Responsibility
19.08.2024 02:02 PM
The pound gains strength
Open trading account Open demo account

A strong economy leads to a strong currency. This is a principle of fundamental analysis that remains unchanged. We all remember how the USD index surged from January to April, fueled by the revival of the American exceptionalism narrative. Investors expecting a slowdown in U.S. GDP were met with the opposite outcome, which set the U.S. apart from other countries and allowed the dollar to strengthen. Now, the UK has assumed a similar position to that of the U.S. earlier in the year. It should come as no surprise that GBP/USD is experiencing a rapid rally.

Following mixed reports on the labor market and inflation in the UK, positive data has started to emerge. The Gross Domestic Product (GDP) expanded by an impressive 0.6% in the second quarter, and retail sales jumped by 0.5% in July, with revisions showing an upward adjustment. This bolsters the belief that the economy will continue its steady progress in the third quarter. In the first half of the year, it outpaced the U.S. and confidently leads the G7.

G7 Economies' Performance

This image is no longer relevant

Strong macroeconomic data allows the Bank of England to proceed cautiously before continuing its monetary easing cycle, which began on August 1 with a reduction in the repo rate from 5.25% to 5%. Derivatives estimate the chances of a second BoE move in September at 37%. By the end of the year, borrowing costs are expected to decrease by 43 basis points, which is significantly less than the 93 basis points expected for the Federal Reserve. The different speeds of monetary policy easing provide favorable conditions for GBP/USD.

Political stability and growing global risk appetite also play into the pound's favor. Not long ago, investors had doubts about whether Keir Starmer's government could fulfill its promise to lead the UK economy to the top of the G7. The budget deficit seemed enormous, and the proposed tax hikes exerted downward pressure on the pound. However, recent macroeconomic data suggests that the Labour Party didn't have to exert much effort: when major competitors, led by the U.S., slow down, the UK gets a chance. So far, it's seizing that opportunity successfully.

I doubt that GBP/USD could have reached the 1.3 level without the rapid rally in U.S. stock indices. Both the S&P 500, Nasdaq, and the Dow Jones index saw their best weekly performance since November, as the market transitioned from fear to greed. While the specter of recession haunted investors in early August, by mid-month, it had been largely forgotten. Global risk appetite is growing, and the U.S. dollar is being sold off as a safe-haven asset.

This image is no longer relevant

The GBP/USD rally is also supported by expectations of signals pointing to the imminent start of the Fed's monetary easing, which are expected to be included in the minutes of the July FOMC meeting and Jerome Powell's speech at Jackson Hole.

Technically, on the daily chart, GBP/USD has managed to consolidate above its moving averages, trend line, and fair value level. This is a clear bullish signal and a reason to increase long positions formed from the 1.28 level. The target levels are 1.3015 and 1.3140.

Marek Petkovich,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
All Analytics
Analytical News
Wall Street on the rise: Nasdaq soars 2.74%, tech leads market higher Procter & Gamble, PepsiCo fall after forecast cuts Hasbro, ServiceNow jump after results March durable goods jump more than expected Alphabet beats revenue estimates, shares rise after hours Asian markets
Thomas Frank
07:15 2025-04-25 +02:00
1090
Fundamental analysis
What to Pay Attention to on April 25? A Breakdown of Fundamental Events for Beginners A few macroeconomic events are scheduled for Friday, but this doesn't matter, as the market continues to ignore 90% of all publications. Among the more or less significant reports today
Paolo Greco
07:06 2025-04-25 +02:00
1150
Breaking Forecast Trading Plan Cryptocurrencies USD/RUB Russian Economy Video Analysis
Trading Instruments
EURUSD GBPUSD USDCHF USDCAD USDJPY AUDUSD EURGBP EURJPY NZDUSD EURNZD Silver Gold #CL #USDX COVID-19 Bitcoin
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

What to Pay Attention to on April 25? A Breakdown of Fundamental Events for Beginners

A few macroeconomic events are scheduled for Friday, but this doesn't matter, as the market continues to ignore 90% of all publications. Among the more or less significant reports today
Paolo Greco 07:06 2025-04-25 UTC+2

The Yen Is Looking Stronger and Stronger

The nationwide Consumer Price Index published last week showed accelerated core inflation in March—from 2.6% to 2.9%. Inflationary pressure is increasing, supporting the case for further interest rate hikes
Kuvat Raharjo 01:23 2025-04-25 UTC+2

Canada Awaits Election Results. USD/CAD Outlook

Last week, the Bank of Canada kept its interest rate unchanged at 2.75%, as expected. The accompanying statement was neutral in tone, emphasizing ongoing uncertainty. Confidence is hard to maintain
Kuvat Raharjo 00:59 2025-04-25 UTC+2

The Australian Dollar Could Suffer If the U.S.-China Trade War Escalates

U.S. President Donald Trump once again commented on Federal Reserve Chairman Jerome Powell, openly expressing dissatisfaction with the pace of rate cuts. Another public expression of disapproval of the Fed's
Kuvat Raharjo 00:59 2025-04-25 UTC+2

The Euro Is Waiting for Its Moment

When the market does not move as expected, it often goes in the opposite direction. In recent days, the euro has faced a barrage of negative news. Slowing business activity
Marek Petkovich 00:59 2025-04-25 UTC+2

Wall Street keeps White House in line

The market is showing heightened sensitivity to any good news, but its best days are behind it. The value of US equities as a percentage of the MSCI All Country
Marek Petkovich 11:42 2025-04-24 UTC+2

USD/JPY. Analysis and Forecast

The Japanese yen maintains a bullish tone despite certain headwinds and remains in focus as renewed global risk aversion fuels demand for safe-haven assets. Diminishing hopes for a swift resolution
Irina Yanina 11:35 2025-04-24 UTC+2

XAU/USD. Analysis and Forecast

Gold is showing positive momentum as it attempts to hold above the $3300 level, indicating growing investor interest in this traditional safe-haven asset. The uncertainty surrounding U.S.-China trade relations—highlighted
Irina Yanina 11:33 2025-04-24 UTC+2

Trump Is Playing a Game Where Everyone Loses

According to a senior official at the European Central Bank, President Donald Trump has drawn the entire world into a game where everyone ends up losing — referring
Jakub Novak 11:21 2025-04-24 UTC+2

Trump Desperately Needs a Deal with China

The U.S. dollar surged sharply against most major currencies after President Donald Trump stated that he plans to be very "courteous" with China in any trade talks and that tariffs
Jakub Novak 11:16 2025-04-24 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
Callback widget
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.