In the UK, political pressure is growing as financial difficulties are getting worse. The GBP/USD currency pair has fallen to the 1.2100 level, according to Westpac economists.
With inflation at the top of lists of big economies, while growth projections from organizations like the OECD area at the bottom of those large economies, the UK is facing acute monetary policy issues.
The real GDP increased at an annualized pace of 8.7 percent in the first quarter, according to data released earlier in the day by the UK’s Office for National Statistics. This reading was in line with market expectations and the flash estimate.
Andrew Bailey, governor of the Bank of England, on the other hand, sounded a little more cautious that there are undeniable indications that the economy is slowing. In light of mounting recessionary concerns, the BoE would choose a more gradual approach to raising interest rates. This could discourage traders from placing bullish wagers on sterling, combined with Brexit-related problems.
The GBP/USD pair’s intraday movement, however, was exclusively from USD price dynamics, with little substantial impetus coming from the data. For short-term trading opportunities, traders are now anticipating the US economic docket, which includes the release of the Core PCE Price Index (the Federal Reserve’s preferred inflation gauge) and Weekly Initial Jobless Claims.
The British pound should be able to maintain its dominance against its competitors in the event that safe-haven flows continue to dominate the financial markets in the American session.