GBP/USD to extend further to the downside over the coming weeks – MUFG

FXStreet Insights Team FXStreet

The GBP/USD rate has broken back below the 1.2000 level. In the view of economists at MUFG Bank, GBP downside risks persist despite better sales data.

Downside risks persist

“A recent build-up of long GBP positioning by Leveraged Funds could be vulnerable to liquidation propelling GBP/USD lower still.”

“Instead of the expected modest MoM declines, overall sales increased 0.3% and excluding auto fuel gained 0.4%. The data doesn’t change the overall picture of weak consumer spending. The ex-auto sales print gained 0.2% in June as well but these modest gains were preceded by seven consecutive declines and the record temperatures in the UK in July were very likely a driver of increased sales.”

“We doubt the retail sales data will change the dial on investors’ expectations of the outlook for the UK economy and see this break lower in GBP/USD extending further to the downside over the coming weeks.”

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.

GBP/USD trades with caution above 1.3200 amid UK political chaos

GBP/USD regains the 1.3200 level in early Europe on Monday, failing to fill up the bearish opening gap. UK PM Keir Starmer is set to announce his exit plan later today. That continues to undermine the British Pound amid renewed haven demand for the US Dollar.

EUR/USD struggles above 1.1450 amid concerns over Iran deal progress

EUR/USD stays defensive above 1.1450 in the European trading hours on Monday. Concerns about progress for the US-Iran peace deal and expectations of higher US interest rates keep the US Dollar supported against the Euro. ECB President Lagarde is set to speak later on Monday.

Gold sticks to modest gains; bulls seem hesitant amid Fed hike bets, Iran risks

Gold attracts some buyers at the start of a new week, and seems to have snapped a three-day losing streak to a more than one-week low, touched last Friday. Crude Oil prices turn lower following a modest bullish gap after mediators Qatar and Pakistan announced a formal 60-day roadmap aimed at securing a final US-Iran peace deal. This helps ease concerns around inflation and higher interest rates, offering some support to the precious metal.

Breaking: Iran closes the Strait of Hormuz amid ceasefire deal violation

Iran says it is closing the Strait of Hormuz after accusing the United States (US) and Israel of violating the ceasefire. According to Iran, the decision came over the continued Israeli strikes in Lebanon. The Iranian Revolutionary Guard Corps Navy issued a warning to all vessels: "Do not approach the Strait of Hormuz; otherwise, your security will be jeopardized."

Cardano: Whale accumulation offers limited relief

Cardano (ADA) is trading near $0.158 on Monday after a steep 14% correction in the previous week. While on-chain data from Santiment indicates that some large holders accumulated ADA during the recent sell-off, derivatives market indicators remain mixed.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.