GBP/USD drops as UK data disappoints, will the pair remain below 1.30?

GBP USD Exchange Rate Slumps to Lowest Level in a Month

The Pound to US Dollar (GBP/USD) exchange rate has just hit its intra-day low as a raft of UK economic data releases have disappointed the markets this morning.

Disappointing UK economic data

Retail Sales figures in the UK disappointed for the month of January after being released at 2.5%, when the consensus was for 2.6% which was already a drop from the previous figure. At the same time the Consumer Price Index figures, which reflect UK inflation levels have now dropped below the Bank of England’s 2% target. The figure released also missed expectations after hitting 1.8% in January, when markets were expecting a drop to 1.9%.

Brexit impacting UK economic performance

Due to the UK being set to leave the EU at the end of next month, economic data releases are beginning to have a greater impact on GBP exchange rates than they have for the past year or so as politics has been the main driver of currency movement. I believe this is due to the economic updates being followed more closely owing to concerns surrounding the UK economy and the negative effects of the uncertainty surrounding the UK moving forward.

The US Dollar has also been strengthening recently after some promising words from US President, Donald Trump in regards to a trade deal with China. Although the deadline date of March the 1st looks unlikely to have the deal in place, Trump has stated that the deadline could ‘slide for a little while’ if both sides are near a deal.

US economic data expected today

Later today there will be a number of data releases out of the US at 1.30pm. The US Inflation levels will also be announced so there could be further market movement this afternoon. If you would like to be notified should there be any market spikes, do feel free to register your interest with us.

Another key date to look out for will be the date of the next meaningful vote on UK Prime Minister, Theresa May’s deal. It was originally earmarked for this week but the likelihood now is for the end of this month with the 27th being mentioned within market commentary.

Please feel free to register your interest if you wish to be updated on GBP to USD exchange rates. I’ll be happy to reply personally and answer you questions.