Since the beginning of the week, GBPUSD has been trading in a narrow range around 1.3735.
Monthly UK GDP data showed that economic growth in February was less than expected and amounted to 0.4% against expectations of an increase of 0.6%. At the same time, the monthly indicators of industry and production in the manufacturing sector were better than expected. In annual terms, both indicators are still declining. The British Pound is holding its ground and holding off further falls, but stronger fundamentals are needed to recover against Dollar.
The Bank of England announced that chief economist Andy Haldane will leave his position on the Monetary Policy Committee after the June meeting, and this negatively affected the intraday dynamics of the pound. Haldane remains opposed to lowering the interest rate into negative territory, so we can assume that this scenario will become more likely. The UK regulator continues to focus on consumer inflation and does not rule out easing its monetary policy in the second half of the year. Therefore, inflation indicators will be key for the dynamics of the British currency in the coming months.
GBPUSD Trading Signal
In the forecast, I assume a strengthening of the GBPUSD to 1.3800.