Pound Sterling slides as UK economy barely grow in November
The Pound Sterling faces selling pressure in Thursday’s European session after the release of the United Kingdom’s (UK) monthly Gross Domestic Product (GDP) and factory data for November. The Office for National Statistics (ONS) reported that the economy returned to growth after contracting in October. However, the growth rate was slower than projected. The economy rose by 0.1% after declining at a similar pace in October. Economists expected the economy to have expanded by 0.2%.
Both Manufacturing and Industrial Production data contracted in November on a monthly as well as annual basis. Month-on-month, Industrial and Manufacturing Production contracted by 0.4% and 0.3%, respectively. The pace of decline was slower than that seen in October. Economists expected Industrial Production to have grown by 0.1%, while Manufacturing Production was estimated to have remained flat. Read more…
GBP/USD Price Forecast: Bears have the upper hand amid BoE rate cut bets
The GBP/USD pair extends the previous day’s retracement slide from the 1.2300 mark and attracts some follow-through selling on Thursday. Spot prices stick to intraday negative bias through the first half of the European session and fail to gain any respite from the mixed UK macro data. The UK Office of National Statistics reported that the economy grew at a lackluster pace of 0.1% in November following a decline of 0.1% in the previous month. The reading, however, missed estimates for a 0.2% growth, while the UK Industrial and Manufacturing Production fell more than expected, by 0.4% and 0.3%, respectively, in November.
This comes on top of Wednesday’s release of a cooler-than-expected UK annual inflation print for December lifted bets for a 25-basis-points rate cut by the Bank of England (BoE) at the next policy meeting on February 6. Apart from this, the emergence of some US Dollar (USD) dip-buying, bolstered by the growing acceptance that the Federal Reserve (Fed) will pause its rate-cutting cycle later this month, further exerts pressure on the GBP/USD pair. That said, the US Consumer Price Index (CPI) released on Wednesday increased the chances that the Federal Reserve could cut interest rates twice this year and might cap the USD. Read more…
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