GBP/USD Analysis: Market Movement Amid Weak US Dollar
At the beginning of the week, the GBP/USD pair was trading around $1.3158, up by about 0.2% from the previous Friday’s levels. This increase was driven by a weaker US dollar despite signs of stubborn producer prices in the United States. The latest US Producer Price Index data came in stronger than expected, rising 0.2% in August, which was higher than the previous month.
However, concerns about a weak US Labor market potentially leading to an aggressive easing cycle by the Federal Reserve have limited the US dollar’s upside potential. Initial US jobless claims rose as expected to 230,000, indicating an increase in the number of unemployed US citizens claiming benefits. This has reinforced worries about a weak US labour market, dampening the US dollar’s performance.
Additionally, a slight decline in US Treasury yields has further pressured the US dollar, keeping the currency near recent lows. On the other hand, the pound (GBP) has struggled to attract investors due to a lack of fresh US data, leading to uncertainty and decreased interest in sterling.
GBP/USD Forecast: Impact of Risk Appetite on Market Movement
Looking ahead, the data-free end of the week in both the US and the UK could influence global risk dynamics and the GBP/USD movement. Market sentiment will play a crucial role, with global political shifts and slower economic growth affecting sterling’s recovery potential. UK inflation data, the Bank of England’s policy meeting, and upcoming economic indicators will be closely watched for further insights.
Technical forecasts for the GBP/USD pair suggest a return to the broader upward trend, with the 1.3250 resistance level confirming bullish control. The Bank of England and the US Federal Reserve announcements will impact the currency pair’s trajectory, while the 1.3000 psychological support remains crucial for a potential reversal of the bullish outlook.
Source : insurancenewsnet.com