GBP update, IMF. UK PMI and US debt in view. UK PMIs show a wider disparity between manufacturing and services.
GBP Impacting factors – IMF’s U Turn
The UK’s economic prognosis has undergone a swift U-turn, and the (IMF) now expects the economy to grow by 0.4% in 2023. The IMF estimated that the UK GDP would fall by 0.6% in 2023 in Jan of this year. Yet it only predicted a 0.3% drop within the past month. The IMF now has renewed optimism, which is supported by declining energy prices, increased corporate confidence, and strong domestic consumer demand.
The most recent S&P PMIs show that the UK economy is still struggling, as the manufacturing sector reporting a further drop in production. Whereas the services sector continued to grow, but at a slightly slower rate than previous month. “The polls coincide with GDP growing 0.4% in the Q2 after a 0.1% rise in the Q1,” adds Chris Williamson, senior business economist at data source S&P Global Market Intelligence.
United Kingdom Flash PMI by S&P Global/CIPS
The US debt ceiling debate is still going on, and there are currently not many indications of a deal. The US Treasury Secretary upgraded her alert from ‘probable’ a few weeks back to ‘very probable’, Despite the fact that all parties are anxious to prevent a collapse in discussions.
Traders keep asking for more money in return for their investments during a probable default duration, pushing short-dated US Bill rates higher. Yesterday, the yield on one-month US Treasury Bills finished at 5.88%, just shy of a new multi-decade peak.
RETAIL TRADERS BOOST NET-LONG POSITIONS
According to statistics of GBPUSD retail traders, 52.45% of traders are net long, with a long-to-short ratio of 1.10 to 1.The percentage of traders who are overall long is up 2.63% from Monday.And up 12.71% from the previous week. Whereas the proportion of traders who are short on the currency is up 0.31% over yesterday and down 18.07% from the previous week.
