British Pound (GBP) Forecasts: GBP/USD and EUR/GBP Ahead of Key UK Data
What's on this page
GBP/USD and EUR/GBP Prices, Charts, and Analysis
The UK economy enjoyed a positive June with the economy expanding by slightly more than expected, while monthly industrial and manufacturing data showed a robust uptick. Preliminary Q2 GDP of 0.4% beat forecasts, and a prior reading of 0.2%, while the economy expanded by 0.5% in June, again beating expectations.
Next week the UK economy remains in focus with the latest jobs and inflation reports released. The UK jobs market remains tight but the unemployment rate is still nudging higher. The UK unemployment rate hit a multi-decade low of 3.5% in August last year and has been creeping higher ever since. Current market estimates for the June data are for the rate to remain unchanged at 4%. Wage growth however continues with the average weekly earnings, including bonus, hitting 6.9% in May, a level last seen in August 2021.
The main economic event next week will be the release of the latest UK inflation report. Headline inflation is expected to drop sharply this month due to the Ofgem energy price cap that kicked in on July 1. Headline inflation is currently 7.9% and is seen falling to 6.7% next week. Core inflation however remains sticky at 6.9% and may only move marginally lower. The breakdown of different inflation baskets will be important in trying to gauge the next move by UK rate-setters.
Tuesday, August 15 – 07:00 UK/06:00 GMT
Wednesday, August 16 – 07:00 UK/06:00 GMT
For all Economic Releases and Events, see the Updated DailyFX Calendar
Sterling is unlikely to make a notable move ahead of next week’s data releases and currently trades on either side of 1.2700 against the US dollar. Short-term support around 1.2670 is holding for now but a break below here should bring the 1.2550 area into play. In the current environment, a confirmed break above 1.2800 is looking unlikely.
GBP/USD Daily Price Chart – August 11, 2023
IG Retail Trader Sentiment shows 56.38% of traders are net-long with the ratio of traders long to short at 1.29 to 1.
For a Full Report including Daily and Weekly Changes, Download your Free Guide Below.
Sterling is trapped in a range against the Euro and it looks likely that this will hold in the short-term. Again UK data next week will be instrumental in any move and with volatility remaining low, range trading may persist. The pair have made a series of higher lows since early July and this may underpin the pair around the 0.8590 level.
EUR/GBP Daily Price Chart – August 11, 2023
If you are Interested in Range Trading, See the Guide Below
What is your view on the British Pound – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.