GBP/USD witnessed heavy selling for the fourth straight day and dropped to a fresh multi-week low.
The GBP/USD pair extended last week’s rejection slide from the 1.2600 neighbourhood and witnessed heavy selling for the fourth successive day on Monday.The downward trajectory extended through the first half of the European session and dragged spot prices to the 1.2200 neighbourhood, or a fresh four-week low in the last hour.
The market fears were further fueled by disappointing UK macro data released earlier this Monday. The official figures showed that the economy unexpectedly contracted by 0.3% in April, marking the first back-to-back decline since the start of the coronavirus pandemic. Adding to this, the UK Industrial and Manufacturing Production also recorded an unexpected fall in April. The data revealed the impact of surging prices on household spending and business activity, fueling recession fears. Apart from this, broad-based US dollar strength was seen as another factor that contributed to the GBP/USD pair’s ongoing decline.
The latest US consumer inflation figures released on Friday reaffirmed bets that the Federal Reserve will tighten its monetary policy at a faster pace to cool price pressures. The prospects for a more aggressive Fed remained supportive of elevated US Treasury bond yields. This, along with the worsening global economic outlook and the prevalent risk-off mood, provided an additional boost to the safe-haven greenback. The fundamental backdrop supports prospects for a further near-term depreciating move for the GBP/USD pair, though traders might refrain from fresh bearish bets ahead of this week’s FOMC/BOE policy meetings.
GBP/USD tumbles to multi-week lows below 1.2250 after weak UK data
GBP/USD has declined to its weakest level since mid-May below 1.2250 in the European session on Monday. The data from the UK showed that the GDP contracted by 0.3% on a monthly basis in April, missing the market expectation for an expansion of 0.2%.
GBP/USD News
EUR/USD drops below 1.0500 amid risk-aversion
EUR/USD is trading below 1.0500, undermined by the risk-off market mood in the European session. Hot US inflation ramped up aggressive Fed tightening bets, rekindling recession fears. The dollar capitalizes on a damp mood and rallying yields.
EUR/USD News
Gold eyes $1,845 and $1,842 on aggressive Fed tightening bets
Gold Price is correcting sharply from five-week peaks of $1,879, reversing most of Friday’s strong rally. The inverse correlation between the US Treasury yields and the bright metal is back in play.
Free Forex Signals 