GBP/USD Slips Over 70 Pips, Can GfK Consumer Confidence Support?

  • GBP/USD is trading sharply bearish at the 1.3691 level ahead of the GfK Consumer Confidence data. 
  • US dollar was high on board as the DXY rose to 93.26 amid the hawkish Fed’s July meeting minutes.
  • Forex trading market participants may sell below $1.3725 to target $1.3658 and $1.3596 levels.

The GBP/USD closed at $1.3755 after reaching a high of $1.3786 and a low of $1.3727. The currency pair GBP/USD found some support and recovered a small portion of its previous day’s loss on Wednesday despite the strength of the US dollar. The GBP/USD is trading bearish ahead of the GfK Consumer Confidence data. 

Five Pound Note, Cash, Money, Pound

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Quick Economic Events Review-Stronger Dollar In Play

The US dollar was high on board as the DXY rose to 93.26 after the release of the Fed’s July meeting minutes. However, the US Treasury yields on the 10-year note fell to 1.25% from their daily high of 1.30% and stopped further gains in the US dollar (FXB, UUP).

At 11:00 GMT, the Consumer Price Index in July dropped to 2.0% against the expected 2.3% on the data front. Additionally, the Core CPI from July also dropped to 1.8% against the expected 2.0% and weighed on the British Pound and limited the gains in GBP/USD. 

The PPI input surged in July to 0.8% against the projected 0.5%, and the PPI output remained flat with expectations of 0.6%. This weighed on the British Pound and stopped the bullish trend in GBP/USD. Later today, the focus will be on the Can GfK Consumer Confidence that’s coming from the UK economy. However, economists are expecting flat data. 

On the other hand, the Federal Reserve Bank of Philadelphia will be reporting the Fed Manufacturing Index that may trigger price action in the GBP/USD pair. The figures are expected to surge from 21.9 to 23.2.

Well, how can we miss the US unemployment claims data from the Department of Labor.  It’s expected to drop from 375K to 362K. Both of the events in the US are positively forecasted and considered good for the US dollar.

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