- GBP/USD extends the previous week’s delines and trades lower on Monday.
- Supply-chain disruptions, limp economic recovery took a toll on sterling performance.
- Broad-based US dollar gains keep pressure on GBP/USD.
GBP/USD edges lower on Monday following the previous week’s downside momentum. The pair opened higher but failed to capitalize the upside momentum and skids towards the multi-month low near 1.3700.
As of writing, GBP/USD is trading at 1.3709, down 0.23% for the day.
The movement in GBP/USD is primarily sponsored by the gains in the greenback. Buoyed by the better-than-expected economic data and the concerns about the rapid increase of the Delta variant of coronavirus cases globally pushed demand for the US dollar owing to its safe-haven appeal.
The US Dollar Index (DXY), which tracks the performance of the greenback against its six major rivals, trades above 93.00 ahead of the FOMC two-day meeting later in the week.
On the other hand, the sterling remained on the back foot as investors remained nervous about the UK inflation growth. A higher inflation reading could force the Bank of England (BOE) to raise interest rates and crunch the already ailing economy.
The data released earlier in the month revealed that the UK economy grew by just 0.1% in July, the pace of the growth was lower than the 1% growth in the previous month.
Meanwhile, US House of Representatives Speaker Nancy Pelosi warned Britain on destabilizing Northern Ireland’s (NI) peace and said there will be no US-UK trade deal before the British government resolved Brexit disagreement with the European Union (EU).
GBP/USD additional levels
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.