Pound Sterling weakens ahead of Employment data – by Sagar_Dua24 GBPUSD BOE GDP Employment SEO
data makes Bank of England policymakers more comfortable in raising interest rates further so that a swift return of inflation to 2% can be ensured. If labor market conditions turn out tight and wage growth continues to be high, the deadly duo of upbeatDaily Digest Market Movers: Pound Sterling fails to capitalize on upbeat Factory data
Stubborn wage growth would increase the chances of further policy-tightening by the Bank of England as households would be equipped with higher disposable income. Monthly Industrial Production for June expanded strongly, by 1.8% against the estimates for 0.1% growth. In May, industrial production contracted by 0.6%. On an annual basis, it rose significantly to 3.1%.
Market sentiment remains bearish as both the United States Consumer Price Index and the Producer Price Index for July showed persistent price pressures.Still, the Federal Reserve is widely expected to keep interest rates steady in September as the modest pace in monthly inflation of 0.2% aligns with the Fed's desired rate of 2%.Technical Analysis: Pound Sterling struggles above 1.2660
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.Information on these pages contains forward-looking statements that involve risks and uncertainties.
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