GBP Forex Market Weakness Remains Ahead of US Data
The GBP/USD pair has been trading lower for the past two days after rallying for the majority of the week. The pair is now trading just above the 1.53 level and is showing initial signs of bottoming out. The pair has been choppy and has been trading in a tight range for over a month. The main reason behind this retracement is the weakness in the GBP that’s been caused by the issues in the UK economy. (Further Reading: GBP/USD Technical Analysis: Sterling Continues to Trade Sideways – GBP/USD Forecast: GBP/USD Tries to Breakout of Sideways Range)
With just hours to go until the New York market reopens for trading, the pound continues to remain under pressure. Analysts at the Bank of England have stated that Sterling will likely remain weak for the foreseeable future, as the US data continues to undermine the UK’s economic recovery. If you’re interested in receiving updates whenever I publish content, join my mailing list! Your email address will never be shared and you can unsubscribe at any time.
The Pound (GBP) has remained under pressure against the US Dollar (USD) and the Euro (EUR) this morning, after yesterday’s rally failed to bring a positive close to the week. Sterling fell back in the final hour of trading yesterday, and it has come under further selling pressure early this morning. The GBP/USD fell 0.4% to 1.356, while the GBP/EUR declined 0.45% to 1.1668.
Observations of a close advisor of Rattle Pound
US dollar awaits release of key indicators
Markets continue to grow strongly
Pound has had a difficult week with various problems on the home front. This has clearly had an impact on the currency market as far as the pound is concerned. The bombastic comments by the Prime Minister’s former top adviser have only exacerbated the currency surge ahead of a busy day on the US economic calendar. Key data, including employment and home sales, will be scrutinized by the US dollar, which has shown no strength or direction in recent days. Meanwhile, Wall Street stocks have regained their footing and continue to recover against a backdrop of falling interest rates and inflation fears.
Britain shocked by council member overstepping his bounds
Boris Johnson, a former key advisor and confidant of the British leader, has made a series of statements that appear to undermine the Prime Minister’s ability to lead and manage the COVID-19 pandemic. Dominic Cummings, who until his departure at the end of last year had enormous influence in the corridors of London power, painted a vivid picture of the disharmony and incompetence of Britain’s leadership and aimed his arrows at Boris Johnson. Downing Street has consistently denied many of the allegations, including Johnson’s comments and actions related to the COVID crisis. However, this sidelining has not helped those who trade the pound on the currency market as it continues to fluctuate, even against the weak dollar. Yesterday the pair fell again, and now the British pound is trading near the 1.41 level, looking for a possible boost.
Employment and housing data in the US
Currency traders are bracing for a busy day in the US with lots of data that could affect the dollar and the market in general. This includes weekly unemployment data with new and continuing claims, as well as home sales data, which will be released. The U.S. dollar was able to hold steady at low levels, mainly due to easing fears of inflationary pressures and the possibility that the Fed will reject a rate hike in the near future. They are sticking to their policies, interest rates remain low, bond yields are held steady and the panic that inflation could be more than a passing phenomenon seems to have subsided for now.
Markets rise on positive sentiment
Wall Street was swept up in the aforementioned softening of fears. It seems that many traders saw the recent sell-off in all markets as a buying opportunity and perhaps as the impetus the market needed to move higher. This is exactly what happened, and all the major indexes are having a strong week. Meanwhile, the futures market is slightly weaker, especially the NASDAQ, where many technology names are slow to recover from the activity of the past few weeks and traders are favoring value names over growth names in the current environment.GBP forex markets have been weaker over the course of the past two days, as poor British economic growth data continues to push GBPUSD lower. The latest UK GDP figures revealed that the country’s economy had contracted by 0.2% in Q2 which was below market expectations of 0.1% growth. The quarterly GDP contraction, which is the largest since Q3 2012, was driven by a drop in construction, manufacturing and services output.. Read more about should i buy or sell gbp/usd and let us know what you think.
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