GBP/USD Forecast: Sellers retain control as Pound Sterling fails to clear 1.2730
After falling toward 1.2600 on Wednesday, GBP/USD made a sharp U-turn and closed the day virtually unchanged above 1.2700. The pair, however, came under renewed bearish pressure in the European session on Thursday and broke below 1.2700.
Following the dismal UK PMI data, Pound Sterling came under selling pressure as investors reassessed the Bank of England's rate outlook. According to Reuters, markets are currently pricing in a less than 50% probability of the BoE peak rate reaching 6%. Highlighting dovish BoE bets, the rate-sensitive 2-year UK gilt yield fell nearly 4% on Wednesday and broke below 5%. Read more...
Pound Sterling plunges as vulnerable PMI deepens recession risks
The Pound Sterling (GBP) witnessed a breakdown of the consolidation formed above 1.2700 as bullish market sentiment failed to neutralize the impact of vulnerable British PMIs reported by S&P Global on Wednesday. The agency reported that factory activities were at their lowest since the pandemic period as firms underutilized their operating capacity due to a bleak demand outlook.
Fears of a recession in the UK economy deepened on Wednesday as warning from Bank of England (BoE) policymakers about significant upside risks to corporate defaults strengthened after the release of vulnerable PMIs. Deepening recession fears are forcing investors to bet on a lower interest rate peak. A poll from Reuters shows that the BoE could pause the rate-tightening spell after an interest rate hike in September. Read more...
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
AUD/USD keeps the bullish outlook above 0.6600
A negative session in the Greenback allowed AUD/USD to leave behind two consecutive sessions of losses and reclaim the area beyond the key barrier at 0.6600 the figure on Thursday.
EUR/USD: Next target emerges at 1.0800
In line with the broad improvement in the risk appetite, EUR/USD reversed part of the recent weakness and advanced to the vicinity of the 1.0800 region in response to the renewed selling pressure hurting the Dollar.
Gold poised to resume its advance
XAU/USD now gathers fresh steam and advances to the highest level in many sessions north of the $2,330 mark per troy ounce on the back of further selling pressure hurting the Greenback as well as mixed US yields.
Bitcoin price is down over 20% from its peak, but BTC macro uptrend remains very much intact
Bitcoin (BTC) price peaked at $73,777 in March, marking a new all-time high recorded over a month before the fourth halving. The bold move north has however been followed by a cascade of load-shedding exercises, though not enough to invalidate the big-picture bullish outlook for BTC.
Bank of England update: A mixed bag
As widely expected, the Bank of England (BoE) held the Bank Rate on hold at 5.25% for a sixth consecutive meeting, its highest level since 2008. However, what was key today was the central bank signalled it could be getting closer to easing policy in the summer, possibly as early as June’s meeting or in August, which is fully priced in at the moment.