The British pound to US dollar exchange rate, also known as GBP/USD, fell today for the second consecutive week. It’s now testing its key 200-day Simple Moving Average (SMA) at around 1.3380. Ongoing pressures continue to weigh heavily on the British pound. In the next few days key economic indicators will come out, which might move markets quite strongly in one or the other direction.
The US Dollar Index (DXY) is on fire! It eventually moved up for two consecutive weeks, piercing the 99.00 hurdle and surpassing its key 200-day SMA. This strengthening of the US dollar poses additional challenges for the British pound, which is facing scrutiny ahead of several key economic reports scheduled for January 15.
On January 12, the British Retail Consortium (BRC) Retail Sales Monitor will provide insights into consumer spending, a crucial factor for the UK economy. After that, January 15th is sure to be a barnburner of a day, with several other major reports hitting the streets. Royal Institution of Chartered Surveyors (RICS) House Price Balance – A leading early indicator of housing market activity. At the same time, GDP figures only report on what’s going on in the economy overall.
The Balance of Trade results will be released that same day as well. This new report will provide a simple, accessible guide to the UK’s evolving trade landscape. New Industrial and Manufacturing Production data You’ll be the first to get them. Along with Construction Output statistics, these will go a long way to illuminate the current economic climate.
The National Institute of Economic and Social Research (NIESR) Monthly GDP Tracker, due out on January 15, is published under embargo. This report will provide a useful, timely bottom line estimate of the UK’s total economic output, thereby shoring up or further undermining market reactions. On that same day, the Bank of Korea (BoK) meets. This would have a major impact on currency flows in the area.
The European Central Bank (ECB) will publish its Accounts on January 15. These clues could provide useful guidance for future monetary policy decisions, which would influence GBP/USD dynamics. Add to the mix the likely convergence of these reports, which will create extreme volatility in currency markets as traders assess their impact.
US initial jobless claims for the week ended Jan 15 are released on Jan 21. This upcoming report should be a treasure trove of insights into the current health of our labor market. Released the same day will be the New York Empire State Manufacturing Index. This installment will provide some perspective on what’s happening economically across the manufacturing sector.
These recent moves in GBP/USD are part of a larger story happening across the world’s currencies and other economic data. Analysts will be watching these releases closely to see how they will continue to affect market sentiment and trading strategies.