GBP/USD - Prices, Charts, and Analysis
- UK growth month-on-month turns negative.
- Headline inflation may hit 10%+.
Cable is ending the week on the back foot and looks set to break back below 1.2100 on a combination of a strong US dollar[1] and a weak British Pound[2]. The recent run higher from the July 14 1.1760 low looks to have come to an end as the greenback perks up going into the weekend. Earlier today, the latest UK GDP data showed the UK economy contracting in June on an m/m basis, while the first look at q/q GDP for Q2 showed the economy contracting by 0.1%. While both figures beat analysts’ pessimistic expectations, the slowdown in the UK economy will have been noted by the government and Bank of England.
British Pound Shrugs Off Marginally Better UK Growth Data[3]
The economic outlook is unlikely to get any better next week with the latest jobs, wages, retail sales and inflation all set to be released. While the jobs market remains robust for now, there is a real chance the headline UK inflation could hit double-figures next week. The Bank of England has already warned that inflation may hit 13% this year, while the economy goes into five quarters of recession. With the UK suffering from sky-high energy prices, a political vacuum in No.10, and a drought-inducing heatwave, further bad economic news will rile an already disgruntled population.
For all market-moving economic data and events, refer to the DailyFX calendar[4]
Sterling continues to face headwinds and is likely to struggle against a range of other currencies. GBP/USD[5] is testing 1.2100 again and a break lower would bring sub-1.2000 levels back into play. The daily chart shows the pair continuing to print
