Bank of England

The GBP/USD price dropped after the United Kingdom released its economic data. The pair has been trading at 1.3121 for the past few days, 1.38% below its highest point this month.

UK GDP and house price data

In Q4, the UK economy improved regardless of the Omicron variant spread. As per the Office of National Statistics (ONS), UK’s GDP grew by 1.3%, translating to a year-on-year rise of 6.6%. Both performances exceeded Median estimates of 1.0% and 0.8%.

This improvement was broad-based, with various industries offering support. For instance, business investments rose by 1.0% in Q4. Personal consumption improved as well in Q4 regardless of the Omicron Variant effects.

The GBP/USD pair had a common reaction to the news since analysts predict that the UK will have weak economic performance. The main reason is the current Ukraine crisis which has led to a rise in the cost of living with an increase in the prices of commodities like wheat and crude oil.

Thus, the Bank of England (BOE) is concerned about a stagflation period where inflation rises accompanied by slow economic growth.

The GBP/USD pair also reacted mildly to UK’s house Price Index (HPI) latest data by Nationwide. It reported an increase in the country’s home prices by 1.1% monthly. Eventually, a 14.3% annual growth rate was recorded, the highest since 2004.

US jobs data ahead

The forthcoming Friday’s US Jobs data will be another significant catalyst for the pair. Economists believe that there will be an increase in the country’s nonfarm payrolls by 490k in March after a 678k rise in February.

Data by ADP reported a rise in jobs by over 555k in March on Wednesday. More data this week showed that vacancies remained above 11 million.

Analysts also expect the US labour market to improve. For instance, a 3.7% drop in the unemployment rate and an average hourly increase of 5.5%

Leave a Reply

Your email address will not be published. Required fields are marked *

Sign Up for Our Newsletters

Get exclusive content in your inbox.

You May Also Like

GBP/USD Forecast with BoE Interest Rate Decision on the Horizon

GBP/USD is seesawing along 1.3800 ahead of the BoE interest rate decision. It is likely to be range-bound between 1.3800 and 1.3900 ahead of the event.

EUR/USD Forecast Ahead of US Inflation and Retail Sales Data

The EUR/USD pair surged on Friday after the disappointing US non-farm payrolls (NFP) data. The US will publish the latest inflation and retail sales data.

GBP/USD Forecast Ahead of the UK Retail Sales

GBP/USD has eased on its decline ahead of the UK retail sales data. The data comes at a time when UK government postponed reopening by a month.

EUR/USD In The Red Ahead of Jobless Claims

The EUR/USD pair has been on a bearish consolidation for the past few days. According to data published on Wednesday, eurozone inflation improved in July.