GBP edges down as UK economy enters in a technical recession

GBP/USD Forecast: Pound Sterling recovery attempts to remain short-lived after mixed data

Following a quiet Asian session on Thursday, GBP/USD came under modest bearish pressure and retreated to the 1.2550 area in the European morning. The pair’s near-term technical outlook suggests that the bearish bias remains intact.

The UK’s Office for National Statistics (ONS) reported that the Gross Domestic Product (GDP) contracted by 0.3% on a quarterly basis in the fourth quarter. With this reading following the 0.1% contraction recorded in the third quarter, the UK economy officially slipped into a technical recession. Read more…

Pound Sterling edges down as UK economy enters in a technical recession

The Pound Sterling (GBP) falls back in Thursday’s early European session as the United Kingdom economy enters into a technical recession. The preliminary Gross Domestic Product (GDP) data from the UK Office for National Statistics (ONS) shows that the economy contracted by 0.3% in the fourth quarter. This means the UK economy has contracted for the second straight quarter in a row – the definition of a technical recession. The data could also ignite expectations of early rate cuts by the Bank of England (BoE), who may be keen to introduce growth-stimulating policies.

The broader appeal for the Pound Sterling has weakened as a most economic indicators, apart from the economic contraction, point to aggressive rate cuts by the BoE to avoid further contraction. The Pound Sterling tends to face foreign outflows when expectations for the BoE turning dovish escalate. Read more…