- GBP/JPY tested into the high end as the Yen recedes.
- UK Public Sector Net Borrowing declined sharply in January.
- UK PMIs due in Thursday, markets expected a mixed steady print.
GBP/JPY rotated on Wednesday, marking in a slight new high for the week as the Pound Sterling (GBP) gets a leg up from a broad-market pullback in the Japanese Yen (JPY). Bank of England (BoE) policymaker Swati Dhingra noted on Wednesday that the outlook for UK inflation remains bumpy, but downwards, noting that UK consumption still remains below pre-pandemic levels as the UK lags behind its developed economy cohorts in Europe and the US.
UK Public Sector Net Borrowing, which tracks the UK government’s budget surplus or deficit, tumbled to its lowest print in at least fifteen years, showing a net decline of £-17.615 billion, far below the forecast £18.4 billion. The figure fell back from the previous MoM print of £6.451 billion, though the National Statistics office tracking of the UK’s federal budget is prone to revisions as time goes on.
Thursday brings the UK’s latest Purchasing Manager’s Index (PMI) figures for February, and markets are expecting the UK S&P Global/CIPS Services PMI to tick down to 54.1 from 54.3 MoM. The Manufacturing PMI component is forecast to see a slight improvement to 47.5 from 47.0, and the Composite UK PMI is expected to hold steady at 52.9.
February’s GfK Consumer Confidence slated for Friday is expected to see a slight improvement to -18.0 from -19.0 to round out the trading week, and Japan will be out for Thursday as the country celebrates Japanese Emperor Naruhito’s birthday.
GBP/JPY technical outlook
The Guppy continues to drift into the high end with the pair sticking close to its highest bids since 2015. The GBP/JPY continues to be bolstered by the 200-hour Simple Moving Average (SMA) near 189.00 in the near-term, and momentum is holding firmly in the bullish side despite slowing gains on the chart.
The GBP/JPY continues to test into the 190.00 major handle, and the pair sees firm technical support after rebounding from the 200-day SMA below 182.00 in early 2024. The pair remains up around 6% from December’s choppy swing low into 178.00.
GBP/JPY hourly chart
GBP/JPY daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.0700 as focus shifts to Fed policy decisions
EUR/USD stays in its daily range below 1.0700 after the data from the US showed that private sector employment rose more than expected in April. The Federal Reserve will announce monetary policy decisions later in the day.
GBP/USD holds steady below 1.2500 ahead of Fed
GBP/USD is off the lows but stays flatlined below 1.2500 on Wednesday. The US Dollar holds its ground after upbeat ADP Employment Change data and doesn't allow the pair to stage a rebound ahead of the Fed's policy decisions.
Gold consolidates losses below $2,300, eyes on Fed policy decision
Gold price hovers below $2,300 as uncertainty ahead of the Fed’s policy announcements improves the appeal of the US Dollar and bond yields. The Fed is expected to hold the policy rate unchanged amid stubborn inflation.
A new stage of Bitcoin's decline
Bitcoin's closing price on Tuesday became the lowest since late February, confirming the downward trend and falling under March and April support and the psychologically important round level.
US Federal Reserve Decision Preview: Markets look for clues about interest rate cut timing
The Federal Reserve is widely anticipated to keep interest rates unchanged. Fed Chairman Powell’s remarks could provide important clues about the timing of the policy pivot.