GBPUSD:
The pound is declining after the release of the UK’s June GDP report: the economy grew by only 0.1% q/q, while business investment showed zero dynamics. Weak data strengthen expectations of imminent BoE easing, even though inflation remains above 4%.
The contrast with the U.S. is clear: a resilient labor market and stronger wage growth support consumption, while U.S. economic surprises remain consistently positive. The macro gap drives capital inflows into dollar assets and outflows from UK gilts, where 10-year yields have slipped to around 3.75%.
An additional negative factor is the worsening trade balance: the goods deficit widened to £8.7B due to a drop in car and chemical exports. Political uncertainty around possible early parliamentary elections persists, raising the risk premium on GBP assets.
Trade recommendation: SELL 1.3435, SL 1.3455, TP 1.3310
Origin: FreshForex
