Sidelined Sterling: GBP Reacts to Global Trends

GBP: Unlucky bystander

GBP: Unlucky bystander

The lack of domestic data releases has left the pound moving merely in line with global dynamics. Yesterday’s drop in the dollar sent Cable above 1.2650, a smaller rally compared to other peers. This morning, GBP/USD is inching lower along with other dollar crosses, although it appears that the pound’s sensitivity to risk sentiment is a bit more limited at this moment.

EUR/GBP is the pair to watch today as inflation data in the eurozone are released. The pair broke above 0.8600 yesterday, and signs of resilient inflation in Spain and Germany could see the rally extend to test the 0.8640 100-day MA.

On the UK side, it will be worth watching mortgage approval figures for July along with other credit statistics. Surging rates and declining demand for loans have already triggered a house price correction in the country.

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Topics

dollar gbp/usd gbp pound eur/gbp cable eurozone inflation data risk sentiment 0.8600+.global dynamics domestic data releases 0.8640 100-day MA mortgage approval credit statistics house price correction.

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