Weak UK data
The British Pound is coming under fresh pressure today amidst a stronger US Dollar and some weaker-than-forecast UK data this morning. On the data front, UK unemployment was seen rising to 4.8% over the last three month, up from the prior and expected 4.7% reading. Alongside this, the claimant count rose sharply to just under 26k, up from -2k prior and well above the 10k the market was looking for. Private sector wages, a key metric tracked by the BOE, also fell, moving lower to 4.4%, with the annualised rate settling around the 2.4% level. The only upside in the data was the jump in public sector pay which rose to 5% from 4.7% prior and expected. However, this likely reflects the more expansive fiscal stance which has been in play so far this year and given that the upcoming budget is expected to signal an end to this, should prove transitory.
USD Rally Continues
Along with selling pressure on GBP from poor UK data, the continued rise in USD is also weighing on the pair here. Fresh tariff threats from Trump against China have rocked risk markets in recent days, leading to a surge in safe-haven demand for USD. While this narrative holds, USD looks likely to continue higher here. The caveat to that is Powell’s speech later today. If Powell is seen sounding more decidedly hawkish, Fed easing expectations should come back into focus here causing some pullback in USD.
Technical Views
GBPUSD
Recent price action in GBPUSD now looks quite toppy, particularly the bearish divergence in momentum studies on that peak. With price having broken below the rising trend line and the 1.3427 level. Risks of a deeper push lower are seen if we move through the support currently being tested at 1.3264.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.