- The British pound lost 0.63% on the week.
- US consumer confidence, which fell to a 20-year low, increased appetite for the dollar.
- GBP/USD falls due to a stronger dollar, and weak US economic data.
The GBP extends its losses to two consecutive days, trading below 1.2200, after touching a daily high far from 1.2300 and tripping the 1.2190 area in the American session. At the time of writing, GBP/USD is trading at 1.2189.
GBP/USD fell due to a stronger dollar and weak US data.
Sentiment turned sour after the disappointing US consumer confidence reading fell to a decade low to 98.7 from a downward revision of 103.2 in May. US equities tumbled on this data, causing a countercyclical movement of the dollar, which rose instead of falling, and returned to exceed 104,000 points, as the dollar index shows.
At the same time, other US economic data was released, led by the Richmond Fed Manufacturing Index, which disappointed expectations, down -19.0 vs. -12.0 expected, while the Dallas Fed services contracted.
GBP/USD reacted negatively and suffered the same fate as US stocks, falling below the June 27 low at 1.2238, exacerbating the move lower thereafter, through 1.2200, recording a new weekly low at 1.2180.
On the other hand, more policy makers from the Federal Reserve reached the media. San Francisco Fed President Mary Daly commented that the Fed could address inflation, which she says is “half the cause of inflation,” and said the US would see slower growth .
Earlier, New York Fed President John Williams said officials would debate Tuesday whether to raise the federal funds rate by 50 or 75 basis points over the next month. Williams added that policymakers will depend on the data and he does not foresee a recession in his baseline, although he acknowledged that the US economy could slow down.
As for growth, the Atlanta Fed’s forecast for US GDP went from 0% to 0.3% in its last update on June 27.
As for the UK’s economic agenda, the House of Commons passed the Northern Ireland Protocol Bill, which would allow the UK to scrap the Brexit deal, triggering a trade war with the EU, and weighed on the GBP/USD pair.
The dollar index, a gauge of the dollar’s value against six currencies, underpinned by rising US 10-year yields, which rose four basis points to 3,234%, advanced firmly above 104,000. , around 104,560, gaining 0.62%.
The US economic agenda will be attended by Fed Chairman Jerome Powell on Wednesday at an event organized by the European Central Bank.
Technical levels
Source: Fx Street
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