- The Pound Sterling steadies against the US Dollar ahead of a US data-packed week.
- Growing speculation for Trump’s victory has improved the US Dollar’s appeal.
- A sharp decline in UK Retail Sales has boosted BoE rate-cut hopes.
The Pound Sterling (GBP) steadies above the immediate resistance of 1.2930 against the US Dollar (USD) in Monday’s London session. The near-term outlook of the GBP/USD pair has become uncertain after a corrective move from an annual high of 1.3044 recorded last Wednesday. The Cable faced selling pressure as improved speculation for Donald Trump winning United States (US) presidential elections this year prompted the US Dollar’s appeal.
The expectations for Donald Trump increased as US President Joe Biden decided to endorse Vice President Kamala Harris to nominate herself as a contender for elections.
Investors expect Donald Trump’s election victory to lead to a rise in trade restrictions that will increase inflation. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rose to 104.40 but corrected slightly in Monday’s London session.
Meanwhile, firm speculation that the Federal Reserve (Fed) will start reducing interest rates from the September meeting will limit the upside in the US Dollar.
This week, investors will keenly focus on a string of US economic data such as the preliminary S&P Global Purchasing Managers Index (PMI) for July, Q2 Gross Domestic Product (GDP), June’s Durable Goods Orders, and the Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation gauge, for June.
Daily digest market movers: Pound Sterling strenghtens against its peers, except Yen
- The Pound Sterling performs strongly against its major peers, except the Japanese Yen (JPY). The British currency exhibits strength despite a sharp decline in the United Kingdom (UK) Retail Sales data for June, which has raised doubts over whether the Bank of England (BoE) will leave interest rates unchanged in its August policy meeting.
- Data released on Friday showed that UK monthly Retail Sales contracted at a faster-than-expected pace of 1.2% in June. Economists expected a decline of 0.4% against 2.9% growth in May. The decline in Retail Sales was noted across all areas except for automotive fuel. Retail Sales data is a key measure of consumer spending, which drives consumer inflation. Weak domestic demand weighs on price pressures.
- Apart from a sharp contraction in Retail Sales, Average Earnings declined expectedly in three months ending in May. However, the pace at which wages are growing is still higher than what is needed for BoE officials to gain confidence in reducing interest rates.
- Meanwhile, expectations of persistent consumer inflation have slightly increased as UK new Finance Minister Rachel Reeves has promised to consider a wage increase for public sector employees later this month.
- Going forward, the next trigger for the Pound Sterling will be the preliminary S&P Global/CIPS PMI data for July, which will be published on Wednesday. The report is expected to show that the Manufacturing PMI expanded at a faster pace to 51.1 from the former release of 50.9. The Composite PMI is estimated to have increased to 52.5 from 52.3 in May.
Pound Sterling Price Today:
British Pound PRICE Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Australian Dollar.
| GBP | EUR | USD | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| GBP | 0.03% | 0.10% | -0.28% | 0.23% | 0.46% | 0.31% | 0.04% | |
| EUR | -0.03% | 0.00% | -0.24% | 0.19% | 0.41% | 0.27% | 0.00% | |
| USD | -0.10% | -0.01% | -0.27% | 0.17% | 0.30% | 0.26% | 0.00% | |
| JPY | 0.28% | 0.24% | 0.27% | 0.48% | 0.65% | 0.50% | 0.22% | |
| CAD | -0.23% | -0.19% | -0.17% | -0.48% | 0.23% | 0.09% | -0.17% | |
| AUD | -0.46% | -0.41% | -0.30% | -0.65% | -0.23% | -0.14% | -0.42% | |
| NZD | -0.31% | -0.27% | -0.26% | -0.50% | -0.09% | 0.14% | -0.23% | |
| CHF | -0.04% | -0.01% | -0.00% | -0.22% | 0.17% | 0.42% | 0.23% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Technical Analysis: Pound Sterling finds cushion near 1.2900
The Pound Sterling struggles to recover after correcting to near 1.2930 against the US Dollar. The GBP/USD pair weakens after facing a sell-off from a fresh annual high of 1.3044 on Wednesday.
The upward-sloping 20-day Exponential Moving Average (EMA) near 1.2850 suggests that the uptrend is intact. After turning slightly overbought, the 14-day Relative Strength Index (RSI) declines and is expected to find a cushion near 60.00.
On the upside, a two-year high near 1.3140 will be a key resistance zone for the Cable. On the other hand, the March 8 high near 1.2900 will be a key support for the Pound Sterling bulls.