Bank of England

The GBP/USD price dropped to its lowest since November 2020 with the rising demand for the US dollar. The pair is trading at 1.3017, 8.56% below its highest in 2020. It has been weakening since mid-last year.

UK economic recovery

The GBP/USD pair fell on Tuesday after UK’s job numbers report. The unemployment rate fell from 3.9% in January to 3.8% in February, according to the Office of National Statistics (ONS). This performance was remarkable since it improved regardless of the pandemic.

Moreover, the reports indicated increased UK earnings excusing bonuses from 3.8% to 4.0%. Including bonuses, wages increased from 4.8% to 5.4%. UK companies are required to increase salaries to enable workers to beat rising inflation and attract new employees.

These numbers were reported a day after the UK’S GDP report, which shows the country’s economy grew by 0.1% on a month-on-month basis in February. However, the growth is lower than January’s 0.8%. The manufacturing, industrial and construction industries did not do well in February.

On Wednesday, the UK will publish its latest inflation data. Analysts expect a rise in inflation from 6.2% in February to 6.7% in March, with an increased core CPI from 5.2% to 5.4%.

The US inflation numbers on Tuesday will also be an impetus to the GBP/USD analysts expect a CPI rise by 8.4%

GBP/USD forecast

The daily chart reveals that the GBP/USD pair has been in a strong bearish trend in the past few months. And now, the pair is hovering near an important level, which was the lowest level this year. It has continued to remain below the 25-day and 50-day moving averages and the important support level at 1.3164, which was the lowest point in December last year.

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