Flaunt Weekly
HomeEntertainmentGBP/USD consolidates in a range around 1.2200 mark, moves little post-UK macro data
GBP/USD consolidates in a range around 1.2200 mark, moves little post-UK macro data

GBP/USD consolidates in a range around 1.2200 mark, moves little post-UK macro data

  • GBP/USD is seen oscillating in a narrow trading band through the early European session on Friday.
  • A modest USD recovery from a multi-month low acts as a headwind amid dovish BoE expectations.
  • The mixed UK macro data fails to impress traders or provide any meaningful impetus to the major.

The GBP/USD pair struggles to capitalize on the previous day’s positive move to a nearly four-week top and witnessed subdued price action on Friday. Spot prices seesaw between tepid gains/minor losses, around the 1.2200 mark through the early European session and moves little following the release of the UK macro data.

The UK Office for National Statistics reported that the economy expanded a modest 0.1% in November as compared to estimates for a 0.2% contraction. This, however, marked a notable decline from the 0.5% growth recorded in October and was accompanied by the disappointing release of the UK industrial and manufacturing production data. This comes on the back of a bleak outlook for the UK economy, which has been fueling speculations that the Bank of England (BoE) is nearing the end of the current rate-hiking cycle and undermines the British Pound. Apart from this, a modest US Dollar recovery from a seven-month low further contributes to capping the GBP/USD pair.

A modest uptick in the US Treasury bond yields and a softer tone around the equity markets offer some support to the safe-haven greenback. That said, rising bets for smaller Fed rate hikes going forward continue to act as a headwind for the USD and lend some support to the GBP/USD pair, at least for the time being. Investors now seem convinced that the Fed will soften its hawkish stance and the bets were reinforced by the latest US consumer inflation figures released on Thursday. This, in turn, makes it prudent to wait for strong follow-through selling around the major before traders start positioning for any meaningful corrective downfall in the near term.

Market participants now look forward to the US economic docket, featuring the Preliminary Michigan Consumer Sentiment Index later during the early North American session. This, along with the US bond yields and the broader risk sentiment, will drive the USD demand and provide some impetus to the GBP/USD pair. Nevertheless, spot prices seem poised to end in the green for the third successive week and remain at the mercy of the USD price dynamics.

Technical levels to watch

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.

Read More

Greg Aftayev

Greg Aftayev is a Journalist at Flaunt Weekly Covering Tech News.

Magazine made for you.