What happened to the British Pound this week? Do you know the reasons why the pound trading lower❓

These are the few reasons why the pound trading lower against other currency pairs:

  • The British pound started this week with a bearish note, on Monday touched $1.2080 its lowest level since March 26th. The pound dropped after the Bank of England official Haldane said that the central bank is examining a range of unconventional policy tools, including negative interest rates. ‘The economy is weaker than a year ago, and we are now at the effective lower bound, so in that sense, it’s something we’ll need to look at — are looking at — with somewhat greater immediacy,’ he remarked in an interview. Later during the European session, the pound rebounded to 1.22 after hitting two-month lows.
  • On Tuesday the Sterling traded steady as the UK unemployment rate unexpectedly falls to 3.9% from 4% in the previous period and below market expectations of 4.4%. Another factor involved in the GBP recovery after the UK government announced a new tariff regime, known as UK Global Tariff (UKGT).
  • During Wednesday the British Pound struggled to edge higher after UK CPI slowed to 0.8% in April 2020, from 1.5% in the previous month and slightly below market expectations of 0.9%. That was the lowest rate since August 2016.
  • On Thursday the currency pair slightly rebounded after better-than-anticipated UK PMI prints for May. The services PMI increased to 27.8 in May 2020 from an all-time low of 13.4 in the previous month. Meantime, British Prime Minister’s official spokesman said on Thursday that the country has agreed on a deal with a pharmacy company to acquire antibody tests.
  • Today we saw the UK April retail sales slumped to -18.1% vs. -15.5% expected, it is the biggest plunge in retail sales due to the coronavirus pandemic. While the core retail sales also missed expectations and fell 15.2%. On the other hand, sales for non-store retailing jumped at a record 18 per cent and sales for alcohol stores went up 2.3 per cent. The Pound dropped to the session low 1.2160 after the weak economic data.

$GBP/USD Technical outlook

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Syam KP | Gulf Brokers

Syam KP | Gulf Brokers

A financial investment professional with over 9 years of FX and capital market industry. Chief analyst at Gulf Brokers https://gulfbrokers.com/en/research/blog