GBP struggles despite upbeat UK retail and PMI data – BBH

FXStreet Insights Team FXStreet

GBP/USD is struggling to recover despite encouraging UK economic data. UK retail sales growth unexpectedly rose in September, underpinned by online jewelers reporting a strong demand for Gold, BBH FX analysts report.

BOE easing expectations cap sterling rebound

"Total retail sales volumes increased 0.5% m/m (consensus: -0.4%) vs. 0.6% in August. Excluding auto fuel, retail sales volumes increased 0.6% m/m (consensus: -0.6%) vs. 1.0% in August. Over Q3, sales volumes are up 0.9% and suggests UK real GDP growth (due November 13) will likely overshoot the BOE’s 0.3% q/q projection."

"UK private sector growth momentum surprises to the upside in October. The composite PMI improved to a 2-month high at 51.1 (consensus: 50.5) vs. 50.1 in September. The services PMI also rose to a 2-month high at 51.1 (consensus: 51.0) vs. 50.8 in September while the manufacturing PMI increased to a 12-month high at 49.6 (consensus: 46.6) vs. 46.2 in September."

"The swaps market price in roughly 25% odds of a 25bps cut to 3.75% at the next BOE policy on November 6. Over the next 12 months, the swaps market implies 50bps of easing and the policy rate to bottom at 3.50%. The expected fiscal drag from the upcoming UK budget (scheduled for November 26) will likely leave room for the BOE to deliver more easing. As such, we expect further GBP underperformance versus EUR because the ECB is likely done easing."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD falls to near 0.7100 after slipping below 50-day EMA

AUD/USD depreciates after registering minor gains in the previous day, trading around 0.7120 during the Asian hours. The technical analysis of the daily chart shows the pair consolidating sideways within a rectangle pattern, as neither bulls nor bears gain control. The AUD/USD pair is holding a slight bearish tone however as it sits beneath both the nine-day and 50-day EMAs.

160.00: USD/JPY back near intervention territory after upbeat US jobs report

US Nonfarm Payrolls beat expectations by a wide margin in May, with 172K jobs added. The US Dollar rebounds after the release, helping USD/JPY recover from its intraday lows. Warnings from Japanese authorities continue to limit upside potential near the 160.00 threshold.

Gold targets $4,300 amid stronger Dollar

Gold faces increasing selling interest and navigates the area of three-month lows near the $4,300 mark per troy ounce on Friday. The precious metal’s decline comes as traders assess the stronger-than-expected NFP, while the bid bias in the Greenback and higher US Treasury yields also collaborate with the retracement.

Cardano hits five-year low even as Hoskinson clarifies "break" isn't an exit

Cardano (ADA) price is down 10% at press time on Friday, extending losses over 30% so far this week amid Charles Hoskinson's clarification that "break" isn't an exit.

Week ahead – Fed countdown begins amid US inflation data and geopolitical risks

Fed Chair Warsh’s first meeting approaches as key US inflation data could reshape expectations. Oil prices remain elevated as US-Iran talks continue; tariffs also return to the spotlight. ECB is expected to hike; will it be a one-off move or is July live?

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.