GBPUSD remains under pressure; the Pound sterling is taking any opportunity to reach stability.
The British Pound is taking severe damage from the USD attack and is using every single opportunity to recover. The current quote for the instrument is 1.3023.
The lack of any important macroeconomic data from the United Kingdom makes the “greenback” behaviour the only factor that is now influencing the GBP. Sometimes this pressure pushes the Pound to the downside border of the short-term range but there are local pauses that help the British currency to recover a little bit – just like now.
The current tendencies in the British economy are the same as in other developed countries. The labour market is stable, the unemployment rate is 3.8%, and businesses and enterprises continue creating new jobs, although it’s now very simple – they are still fighting the delivery interruptions issue that emerged during the pandemic and escalated due to geopolitical tensions. The CPI is rising, just like everywhere but it is extremely high for the United Kingdom. The March report said that inflation added 1.1% m/m and was 7.0% y/y. It is clear that the key reasons for this upsurge are energies and food products, it’s another global tendency, just like the others. The retail sales started falling in February and lost 0.3% m/m and the March data might be even worse. Obviously, households will cut their expenses and the results will surely be seen in all macroeconomic indicators in the summer.
Unlike the US Fed, the Bank of England won’t raise the rate ahead of the schedule because it believes that the CPI may finally balance itself, so the Pound shouldn’t expect any support here.
This week, the United Kingdom will release important data only on Friday. It will be the GfK Consumer Confidence in April and the Retail Sales in March.