Home Forex British Pound (GBP) Latest – GBP/USD Boosted by Positive UK PMIs, Weak US Dollar

British Pound (GBP) Latest – GBP/USD Boosted by Positive UK PMIs, Weak US Dollar

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GBP/USD Analysis and Charts

  • UK business activity continues to expand.
  • GBP/USD buoyed by Sterling strength and US dollar weakness.

Most Read: US Dollar Trims Losses After Fed Minutes Caution Against Early Cuts

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The latest S&P UK PMIs (February) showed UK private sector growth expanding ‘for the fourth consecutive month and at the fastest pace since May 2023.’

  • Global Composite PMI – Actual 53.3 vs. Prior 52.9
  • Global Manufacturing PMI – Actual 47.1 vs. Prior 47
  • Global Services PMI Actual – 54.3 vs. Prior 54.3

Commenting on today’s release, S&P chief business economist Chris Williamson said that the survey pointed to 0.2-0.3% growth in Q1 2024 and that the ‘upturn in growth has been accompanied by a surge in optimism about year-ahead prospects to the highest for two years.’

This positive outlook chimed with recent commentary from the UK central bank. Bank of England governor Andrew Bailey, speaking at the Treasury Select Committee on Tuesday said, that the current UK recession may already be over and that there were ‘distinct signs of an upturn.’ Mr. Bailey added that if you look at recessions going back to the 1970s, the range for all previous recessions was ‘something like 2.5% to 22% in terms of negative growth’, making the current 0.5% contraction look pale in comparison.

Wednesday’s US FOMC minutes had something for everyone with some members believing that interest rates have peaked, while others members saw risks ‘of moving too quickly’ on rate cuts. The latest Fed implied rates show the first 25 basis point cut nearly fully priced-in at the June meeting, with around 88 basis points of cuts seen in 2024. This is now close to the Fed’s ongoing narrative that rates will be cut slightly less and slightly later than market’s more dovish pricing seen over the prior few months.

Cable (GBP/USD) is currently changing hands around 1.2675after having touched a three-week high of 1.2710 earlier in the session. If today’s high can be reclaimed then a cluster of prior highs between 1.2750 and 1.2800 come into play.

See How IG Client Sentiment Can Help Your Trading Decisions:

of clients are net long.

of clients are net short.

Change in Longs Shorts OI
Daily -27% 14% -7%
Weekly -32% 15% -10%

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.

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