GBP/USD PRICE RETRACEMENT AHEAD?
GBP/USD PRICE RETRACEMENT AHEAD?
The GBP/USD exchange rate is poised for potential volatility this week, influenced by upcoming U.S. economic data and evolving trade dynamics.
The preliminary estimate for Q1 2025 U.S. GDP growth is scheduled for release on Wednesday.
A weaker-than-expected GDP figure could dampen expectations of further Federal Reserve rate hikes, potentially leading to a depreciation of the U.S. dollar and benefiting the British pound.
The U.S. dollar has experienced a decline, with the WSJ Dollar Index falling by 0.4% to 99.03.
This marks its largest one-day percentage decline since May 15, 2024, and could signal a shift in investor sentiment.
WSJ
Despite a 0.1% contraction in the UK economy in January, recent retail sales data showed an unexpected 0.4% rise in March, indicating resilience in consumer spending.
The Bank of England has recently cut interest rates to 4.5% from 4.75% due to a weaker UK economy and rising inflation.
Further rate cuts may follow, which could influence the GBP/USD exchange rate.
The introduction of a 10% U.S. tariff on UK imports by President Donald Trump has increased economic uncertainty in the UK, potentially affecting the pound's performance.
