Negative Indicators Are Piling Up For GBP
Skerdian Meta • 1 min read
GBP/USD has enjoyed some good times recently, although most of that climb was a result of USD weakness.
However, there was some positive momentum coming from the UK side as well. We have seen some surprisingly strong economic numbers from the UK over the last couple of months or so, after some really weak numbers previously.
It was surprising seeing such strong number with Brexit looming. But they didn´t last long though. In the last 2-3 weeks, the UK economic data has taken a dive across all sectors.
Last week, the service sector PMI indicator unexpectedly declined 2 points. This is a major drawback since this sector makes up about 75% of the UK economy.
Manufacturing production also took a dive last week. Yesterday, the average earnings lost 2 points from the previous month. This is another major drawback since it hurts people´s pockets first hand and it will be reflected in retail sales later on.
Inflation surged again to 2.9% on Tuesday, but that´s not a good thing for the UK economy,, because the BOE (Bank of England) can´t do much to revive the economy with these inflation numbers.
Today, retail sales figures showed a 1.2% decline, which is yet another horrible number coming from the British Isles.
GBP/USD is continuing its slide. But again, that´s coming from the USD side because most forex majors are losing ground against the Buck.
Although, sooner or later the GBP weakness will hit the market hard because all economic indicators are turning negative pretty quickly and that´s without taking politics into consideration. If we add the political situation that Theresa May managed to complicate then the big picture looks very gloomy for the Pound.