Sat, January 28, 2023

GBPUSD Recovers Amidst the Weak UK Economy Data

Pound and other currencies

The GBPUSD pair recovered from its losses last Friday. The pair inched its way up to 0.21%, or 0.0025 points, and has reached ranges of £1.2015 to £1.2069 during yesterday’s trading session.

The weaker-than-expected data from the UK economy has weighed on the pound sterling. The UK economy saw a decline of 0.2%, far worse than forecasts of 0.5% by economists.

The data came from the Office of National Statistics last Friday. The drop was the first in seven years, and UK traders now fear the possibility of a recession.

If there would be a recession in the UK, it will be the first one after a decade.  According to the Office of National Statistics, the main sectors to suffer negative effects are the manufacturing, energy, and mining industry.

Sajid Javid, the Chancellor of the Exchequer, blamed the challenging global economy for the decline of other countries’ economies. However, economists are saying that there are also other fundamentals affecting the British economy.

Brexit-related concerns, the new BPM stance, and inventory stockpiling before the Brexit date have also weighed on the British economy.

The chancellor announced a boost in government spending for the coming months to bolster the slowing economy.

The pound sterling has continued to receive blows from current events in Great Britain. The GBPUSD pair has declined by more than 4.5% since the beginning of July.

Pound News

The GBPUSD isn’t the only pair that made a recovery. The pound sterling has inched up against other major currencies such as the Euro, Chinese Yuan, and Australian dollar.

The GBPEUR gained 0.51%, or 0.0054 points, and has reached up to £1.0807 yesterday. The GBPAUD rose 0.82, or 0.0146 points. And the GBPCNY climbed 0.26% or 0.0223 points.

The GBPJPY pair, on the other hand, declined 0.17%, or 0.21 points, in yesterday’s session, reaching as low as £126.56.

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