Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

Pound Under The Dollar Hammer

By MarketPulse (Kenny Fisher)ForexApr 25, 2022 09:25AM ET
www.investing.com/analysis/pound-under-the-dollar-hammer-200622836
Pound Under The Dollar Hammer
By MarketPulse (Kenny Fisher)   |  Apr 25, 2022 09:25AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

The British pound is sharply lower at the start of the week. In the European session, GBP/USD is trading at 1.2739, down 0.77% on the day.

Weak UK Data, Fed Sinks Pound

The week ended with soft British data, and the pound took it on the chin, sliding 1.44% on Friday.

Retail sales fell by 1.4% in March, following a -0.5% release in February. High inflation, which hit 7% in March, has dampened consumer spending and is putting a huge strain on household incomes. BoE Governor Bailey recently acknowledged the negative impact inflation is having, saying that real incomes would suffer a “historic shock”. The UK economy has almost completely recovered from the pandemic, but there are dark clouds hovering; namely, soaring energy prices and the specter of stagflation.

The BoE has raised interest rates three consecutive times, but this hasn’t slowed down inflation. The Bank says the Ukraine war could push inflation as high as 8% in Q2 and even higher in the third quarter. It seems that double-digit inflation is a real possibility later this year, which would truly be a nightmare scenario for the central bank.

As well, UK Services PMI underperformed. The index slowed to 58.3 in March, down from 62.6 prior and shy of the consensus of 59.9. The PMI survey found that the cost of living crisis and the war in Ukraine were the main reasons for the slowdown.

Across the pond, hawkish talk from the Federal Reserve late in the week propelled the US dollar higher and added to the misery of the British pound. On Thursday, Fed Governor Powell hinted at a half-point rate hike in May, and Fed member Mester said on Friday that she favored one or more half-point hikes in order to boost the fed funds rate to 2.5% by the end of the year. The Fed is sending clear signals that it plans to move quickly on rate hikes, in order to contain surging inflation.

GBP/USD Technical

  • GBP/USD faces resistance at 1.2917 and 1.3012
  • There is support at 1.2745 and 1.2650

GBP/USD Daily Chart
GBP/USD Daily Chart

Pound Under The Dollar Hammer
 

Related Articles

Shane Neagle
Has the U.S. Dollar Officially Peaked? By Shane Neagle - Nov 29, 2022 7

The U.S. dollar is trading near multi-month lows against its major counterparts on expectations the Federal Reserve may slow down its hiking campaign. The pullback in the dollar...

Pound Under The Dollar Hammer

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email