GBPUSD has GDP growth data on Thursday that will need to be strong to confirm the latest yearly highs.
GBPUSD: Weekly Chart
GBPUSD has broken out of a rising weekly chart trendline to new highs at 1.2992. A test of 1.30 will be likely today, and the GDP figures tomorrow should be watched by traders for a potential change in trend.
The UK was able to shrug off weaker employment data, where jobs added were 102k versus 125k. The unemployment rate also jumped to 4% from 3.8% after the data, but traders hope that some weakness in employment will start to see the Bank of England back down on rate hikes.
“Due to high inflation, however, the real value of weekly earnings is still falling, although now at its slowest rate since the end of 2021,” said Darren Morgan, director of economic statistics at the UK’s ONS.
Tomorrow’s GDP data is also supposed to be weaker at -0.1%, down from 0.1% on a quarterly basis. That means a -0.7% year-on-year return for May, down from 0.5%.
“The UK economy has so far been resilient to interest rate risk, though it will take time for the full impact of higher interest rates to come through,” the Bank of England wrote.
Wall Street cheered a “pivotal” inflation release for the United States, where the Consumer Price Index gained 0.2% last month after edging up 0.1% in May.
“The good news is the expectation that the Federal Reserve is only going to hike one or two more times. This is going to be a boost for the market because the end of the rate-hiking cycle is coming. We’re not yet at the Fed’s mandate, and core data suggests that we still have more room to go,” Phil Blancato, at Ladenburg Thalmann, said.
