Sterling makes a significant downward turn

GBP prices, news and badysis:

• The ever-decreasing prospect of a rise in the Bank of England's interest rates in the UK weakens the pound sterling as a result of poor economic data.
• The bank will probably wait for both economic recovery and greater certainty about Brexit before even considering a tightening of UK monetary policy.

The pound sterling undermined by the weakness of the British economy

The GBPUSD fell below the psychologically important level of 1.30 and is expected to weaken after a break-off below the support line of a bearish uptrend of the daily chart to its lowest level since two weeks.

GBPUSD price table, daily calendar (23 November 2018 – 6 February 2019)

Graph by IG (You can click on it for a larger image)

The pound sterling was mined over the last week by survey data suggesting that the UK economy is collapsing. The Purchasing Managers' Index for the British manufacturing sector, released last Friday, fell 54.2 in January to 52.8, well below the 53.5 expected.

This lack of momentum was highlighted on Monday by a weaker-than-expected construction PMI and again Tuesday by the PMI of the services sector, which fell 51.2 to 50.1, below the forecast of 51.0. the lowest since 2-1 / 2 years.

This suggests that Bank of England will be waiting to see what it will do on Thursday, and that it will not be in a hurry to raise rates for the rest of the year. year.

Negotiations on Brexit are still blocked

Regarding Brexit, British Prime Minister Theresa May will travel to Brussels on Thursday to try again to reach an agreement, but no progress is expected and this will probably avoid a significant recovery of the GBP. A poll conducted Wednesday by the Reuters news agency revealed that respondents were predictingthe terling will win between 2% and 5% if Great Britain separates with the EU with a divorce agreement, but will slip between 5% and 10% in case of disorderly Brexit.

More to read:

Beginner's Guide to the Bank of England

GBP News and Analysis

British Pound: What Every Operator Needs to Know

Resources to help you trade FX markets:

Whether you are a beginner or experienced trader, DailyFX provides you with many resources to help you:

— Written by Martin Esbad, Analyst and Publisher

Do not hesitate to contact me via the comments section below, by e-mail at the address [email protected] or on Twitter @MartinSEsbad