GBP down against major currencies due to lack of direction

The Pound kicked off last week with mixed trading dynamics, with Sterling closely tracking market sentiment due to a dearth of significant data releases. This flexibility enabled it to gain ground against its weaker counterparts.

On Tuesday, GBP faced turbulence following the release of the latest UK unemployment data. Unemployment surpassed forecasts, accompanied by a continued slowdown in wage growth. Despite these challenges, the Pound held steady, buoyed by a two-year high in real wage growth.

On Wednesday, the Pound initially saw an uptick in response to the latest UK inflation figures, as inflation moderated less than anticipated. This led markets to postpone their bets on an impending interest rate cut. However, dovish comments from Bank of England Governor Andrew Bailey reversed this trend, weakening Sterling's position.

Throughout Thursday's trading session, this prevailing sentiment continued to exert pressure on Sterling, especially with another absence of significant data releases.

Friday brought disappointing news with March's UK retail sales data, revealing stagnant sales. As prices continued to climb, UK consumers exhibited signs of weakening spending, further burdening the Pound.

Previewing the upcoming week for the Pound, Monday will feature two sets of data releases from the Confederation of British Industry, potentially influencing its trajectory.

The upcoming release of the business optimism index for the second quarter of 2024 is expected to indicate an uptick in business confidence, potentially bolstering Sterling. However, this positive sentiment might be dampened by the anticipated negative reading in the industrial trends orders, forecasted to be at -16.

Next, on Tuesday, the latest batch of UK preliminary PMI releases for April is scheduled to be published. Market expectations anticipate an increase in activity for both the manufacturing and service sectors compared to the previous month. This positive outlook could bolster Sterling by indicating sustained economic resilience.

Following that, data releases are expected to diminish, potentially leading the Pound to trade without clear direction for the remainder of the week's session.

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