GBPUSD falls as a result of mixed UK statistics.
On Friday, the British pound is fluctuating. GBPUSD is trading at 1.2701, up 0.08% in the European session.
Retail sales in the United Kingdom have increased, yet GDP has decreased.
Retail sales in the United Kingdom increased 1.3% month on month in November. Rebounding from 0% in October and exceeding the consensus estimate of 0.4%. This was the fastest rate of growth since January. And it was felt across all sub-sectors. Retail sales increased 0.1% year on year. Following a downwardly revised 2.5% loss in October and above the market forecast of -1.3%.
The GDP report was less upbeat, with second-estimate GDP for Q3 coming in at -0.1%, compared to -0.1% in the previous quarter. The preliminary estimate is 0%. This has increased fears that the UK’s sluggish economy would enter a recession. As negative growth in the fourth quarter would be deemed a technical recession. GDP for the second quarter was revised downward to zero increase from 0.2% before.
Furthermore The Bank of England must determine what to do with this jumble of data. The poor GDP could put pressure on the Bank of England to decrease interest rates. But the dramatic rise in retail sales supports the central bank’s ‘higher for longer’ position. The Bank of England has kept the cash rate at 5.25% for three years in a row.
Moreover This week, Federal Reserve members in the United States have reacted to market volatility. Rate cuts are expected next year. Markets have priced in up to six rate cuts in 2024, but Fed officials have stated that the markets are getting ahead of themselves. With Atlanta Fed President Raphael Bostic predicting two rate cuts in the second half of 2024. The PCE Price Index. The Fed’s favorite inflation index, will be released on Friday. In November, the headline and core readings are predicted to remain unchanged at 0.2% and 0%, respectively.
GBPUSD Technical Analysis
GBPUSD is placing pressure on the 1.2720 barrier level. The next level of resistance comes at 1.2750.
1.2636 and 1.2582 provide assistance.
