Pound Under Pressure, UK Economic Data Fails to Dampen Dollar
The British pound remained under pressure near a three-week low against the US dollar in trading on Friday (July 24). GBP/USD held below 1.3340 and was on track for a weekly decline of around 1%.
The pound's weakness was due to a strengthening dollar and growing investor caution. Concerns about the UK's fiscal situation also limited the currency's recovery efforts.
However, UK business activity recorded better-than-expected results. The manufacturing PMI rose to 52.8 from 52.5, while the services PMI returned to expansion at 51.8 from 48.8.
UK retail sales also increased by 1% in June, against the expected 0.3% decline. Annually, retail sales grew 4.2%, well above market projections of 2.3%.
However, this positive data was not enough to offset the dollar's strength. The attack on a Saudi vessel in the Red Sea pushed Brent oil prices near US$100 per barrel, fueling inflation concerns and lifting US bond yields to their highest levels in months.
Market sentiment was further dampened after the United States announced new tariffs of 10% to 12% on 60 trading partners, including the UK. As long as demand for the dollar and inflation concerns remain high, the pound has the potential to continue its weakness. (arl)
Source: Newsmaker.id
