GBP/USD – Pound Yawns as Inflation Slips to 1.3%

The pound has remained steady this week, despite some dismal economic data. GDP declined by 0.3% in November and inflation slowed to 1.3% in December. If the soft economic numbers keep coming, the pound could find itself in 1.29 territory in a hurry.
Kenny Fisher
GBP/USD Price Forecast - British Pound Pulls Back

GBP/USD is trading sideways in the Thursday session. Currently, the pair is trading at 1.3039, up 0.02% on the day.

Inflation Falls to 3-Year Low

The British economy declined 0.3% in November, and there was more bad news on Wednesday, as consumer inflation slowed to just 1.3% in December. This marked the lowest level since November 2016.  Inflation was running at a healthy clip of 2.0% in mid-2019, but dropped sharply in the second half the year, as the British economy has been struggling. If inflation continues to sag, the Bank of England will have to consider lowering rates, which would push the pound downwards.

Technical Analysis

With the pound remaining steady, our technical analysis is unchanged. The key line of 1.30 continues to provide support. The 50-EMA is also situated at this level. This is followed by support at 1.2950, which faced strong pressure earlier in the week.

On the upside, 1.3050 was tested on Wednesday and remains vulnerable. This is followed by resistance at the round number of 1.3100.

Pacific Currencies – Daily Summary


After starting the week with losses, USD/CNY is showing limited movement. Currently, the pair is trading at 6.89, up 0.01% on the day. In economic news, Chinese New Loans fell sharply to 1140 billion yuan in December down from 1390 billion a month earlier. This figure was well below the estimate of 1250 billion yuan. China will release GDP for the fourth quarter on Friday, with growth expected to remain unchanged at 6.0%.


It remains a quiet week for AUD/USD. The pair is currently trading at 0.6905, up 0.06% on the day. There are no Australian events on the schedule. We could see stronger movement from the pair on Friday, as China releases fourth-quarter GDP.


NZD/USD is slightly higher in Thursday trade. Currently, the pair is trading at 0.6635, up 0.28% on the day. Later in the day, New Zealand releases the Business NZ Manufacturing Index. The indicator has shown slight expansion in the previous two releases, with readings just above the 50-level.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.