GBP/USD climbed close to 1 percent last week, reversing the losses seen a week prior.
The upcoming week has five releases.
Here is an outlook for the highlights and an updated technical analysis for GBP/USD.
In the UK, the economy posted a modest gain of 0.4% in February. Manufacturing Production rebounded with a gain of 1.3% in February, well above the estimate of 0.5%.
In the US, CPI rose in March, but the reaction of the US dollar was muted. Headline CPI climbed from 0.4% to 0.6% and Core CPI improved to 0.3%, up from 0.1%. Retail sales soared in March – headline retail sales came in at 9.8% and the core reading rose 8.4%, well above the forecast.
The US dollar has given up some ground after a strong rebound in early January. Covid continues to run rampant in the US and Europe, but there is optimism that the roll-out of Covid vaccines will bring about economic recovery later in the year. This week’s highlights include the Fed rate decision and GDP reports in the US, France and Canada.
German CPI posted a respectable gain of 0.5% in December, confirming the initial estimate. However, Eurozone CPI came in at -0.3% for a fourth straight month.
The ECB maintained its interest rate and bond-buying levels at this week’s policy meeting. ECB President Lagarde acknowledged that Eurozone GDP for Q4 would likely be negative but said that growth was expected to rebound in 2021. PMI reports showed that the manufacturing sector remains well in expansionary territory, but the services sector is in a state of decline, with readings below the 50-level, which separates contraction from expansion.
GBP/USD posted considerable gains last week.
The upcoming week has three releases, highlighted by key employment reports.
Here is an outlook for the highlights and an updated technical analysis for GBP/USD.
In the UK, inflation improved to 0.6% in December, up from 0.3%. CBI Industrial Order Expectations and GfK Consumer Confidence remained deep in negative territory, with readings of -38 and -28, respectively. Retail Sales rebounded from a previous decline but just barely, with a reading of 0.3%. This was well shy of the estimate of 1.4%. The December PMIs highlighted a tale of two sectors, as manufacturing came in at 52.9, indicating expansion. Services, however, continues to contract, and slowed to 38.8 points.
GBP/USD showed some strong movement but ended the week only slightly lower than a week earlier. The upcoming week has six releases, including retail sales