GBPUSD:
The UK economy continues to show signs of resilience despite mixed data in recent days. The preliminary services PMI rose to a six-month high of 52.8 in August, while consumer confidence reached a two-year high. This reduces the risk of a sharp deterioration in domestic demand and provides support for the pound.
UK inflation accelerated to 2.9% in July, remaining above the Bank of England’s target. At the July meeting, three of the nine committee members had already voted for a rate increase, while the market continues to price in the possibility of tighter policy before the end of the year. A 0.5% decline in retail sales and an unexpected budget deficit are limiting factors for sterling, but they do not yet change the broader picture.
The external environment is also important for GBPUSD: the US dollar remains under pressure amid concerns over US debt policy and the expansion of long-term bond buybacks by the Treasury. Strong activity in the US services sector limits the scale of dollar weakness but does not change the main impulse of the current session. As long as UK data remain resilient, the growth scenario for GBPUSD retains the advantage.
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