The pound's rise is blocked, waiting for market changes
Due to the difficulties in the British retail industry and market speculation on the Federal Reserve,
GBPUSD
is blocked near 1.2500.
Over the past week, the pound has been hovering around 1.2400. However, it encountered resistance when it broke through the 1.2500 mark. Mainly because UK retail sales were disappointing, falling 0.3% month-on-month, contrary to expectations for a 0.3% growth. The focus was on revised September data, which plunged from -0.9% to a worrying -1.1%. Annualized UK retail sales performed even worse, recording -2.7%, exceeding forecasts of -1.5% and worsening from -1% in the previous period.
While broad market risk sentiment favors speculation that the Fed is done raising interest rates, GBP/USD remains range bound due to poor UK data.
Investors will pay attention to the release of the Federal Reserve meeting minutes next week, consider going long on the GBP/USD currency pair cautiously, and pay close attention to the resistance of 1.2500, looking for possible market changes.
Separately, British Prime Minister Rishi Sunak announced that the British government can now afford to lower taxes due to slowing inflation. Sunak stressed a responsible approach to tax cuts and said the government's target of halving inflation had been achieved. He avoided discussing specific changes to individual taxes, saying more details would be provided in the upcoming autumn statement.
Inflation fell to 4.6% in October, mainly due to lower global energy prices. Rishi Sunak acknowledged the government's role in achieving this target, pointing out that it had avoided inflationary pay rises in response to the strikes. This development allows the government to enter the next phase of its economic plan, which focuses on tax cuts.
In the autumn statement, chancellor Jeremy Hunt will outline the government's tax and spending plans and is expected to confirm the direction of these tax cuts. However, Chancellor Jeremy Hunt has also stressed that tax cuts this autumn are almost impossible, but that rapidly falling inflation and rising tax revenue have created a more favorable environment for these proposed tax cuts.
GBPUSD
is blocked near 1.2500. Over the past week, the pound has been hovering around 1.2400. However, it encountered resistance when it broke through the 1.2500 mark. Mainly because UK retail sales were disappointing, falling 0.3% month-on-month, contrary to expectations for a 0.3% growth. The focus was on revised September data, which plunged from -0.9% to a worrying -1.1%. Annualized UK retail sales performed even worse, recording -2.7%, exceeding forecasts of -1.5% and worsening from -1% in the previous period.
While broad market risk sentiment favors speculation that the Fed is done raising interest rates, GBP/USD remains range bound due to poor UK data.
Investors will pay attention to the release of the Federal Reserve meeting minutes next week, consider going long on the GBP/USD currency pair cautiously, and pay close attention to the resistance of 1.2500, looking for possible market changes.
Separately, British Prime Minister Rishi Sunak announced that the British government can now afford to lower taxes due to slowing inflation. Sunak stressed a responsible approach to tax cuts and said the government's target of halving inflation had been achieved. He avoided discussing specific changes to individual taxes, saying more details would be provided in the upcoming autumn statement.
Inflation fell to 4.6% in October, mainly due to lower global energy prices. Rishi Sunak acknowledged the government's role in achieving this target, pointing out that it had avoided inflationary pay rises in response to the strikes. This development allows the government to enter the next phase of its economic plan, which focuses on tax cuts.
In the autumn statement, chancellor Jeremy Hunt will outline the government's tax and spending plans and is expected to confirm the direction of these tax cuts. However, Chancellor Jeremy Hunt has also stressed that tax cuts this autumn are almost impossible, but that rapidly falling inflation and rising tax revenue have created a more favorable environment for these proposed tax cuts.
Comment:
The UK services sector unexpectedly rebounded above the 50.0 expansion threshold in November, according to the Industry Purchasing Managers Survey. The official S&P Global Services PMI came in at 50.5, above expectations of 49.5 and the previous month's reading. Manufacturing is still in contraction (46.7), but that's an improvement from the previous month's 44.8 and better than expectations for 45.0. The data helped sterling gain across the board, with GBP/USD successfully recouping the previous day's losses GBP/USD surpassing 1.2560. While setting a new high this week, it also reached its highest level since early September.