GBP/USD Forecast: Pound Sterling fails to clear important hurdle
Despite the renewed US Dollar (USD) strength on Wednesday, GBP/USD managed to close in positive territory on Wednesday as hawkish Bank of England (BoE) bets after hot UK inflation data helped Pound Sterling stay resilient against its rivals. The pair, however, has lost its traction after having met resistance near 1.2480 and gone into a consolidation phase.
Early Thursday, US stock index futures trade deep in negative territory amid heavy losses witnessed in big tech stocks following disappointing earnings figures. As investors struggle to find the next fundamental driver, the market mood could drive the pair's action in the second half of the day. A negative opening in Wall Street accompanied by a flight to safety could support the USD and weigh on GBP/USD and vice versa. Read more ...
GBP/USD hampered by UK growth prospects
The IMF has warned that the UK economy could contract by 0.3% in 2023 and expand just 1% in 2024. The government disagrees, with Hunt saying that the UK will "beat the IMF's dismal growth forecasts."
The UK economy did grow in the final quarter of 2022, but only by 0.1%. Early indications point to another 0.1% growth in Q1. A growing economy requires credit, but with the Bank of England continuing to raise interest rates, credit conditions are getting tougher. This makes a period of contraction this year more likely. Read more ...
GBP/USD trades with modest losses below mid-1.2400s, downside potential seems limited
The GBP/USD pair comes under some selling pressure on Thursday and retreats further from the weekly high, around the 1.2470-1.2475 area touched the previous day. The pair remains on the defensive through the early part of the European session and is currently placed near the daily low, around the 1.2420 region.
A combination of factors continues to act as a tailwind for the US Dollar (USD), which, in turn, is seen exerting some downward pressure on the GBP/USD pair. The prospects for further policy tightening by the Federal Reserve (Fed), along with a weaker rise sentiment, lend some support to the safe-haven Greenback. That said, rising bets for an additional interest rate hike by the Bank of England (BoE) might hold back bearish traders from placing aggressive bets and help limit losses for the major. Read more ...
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