- GBP/USD climbs to 1.3504 as the US dollar weakens for two days in a row.
- UK borrowing hit £20.7 billion in June, raising doubts about Reeves’ fiscal strategy.
- Investors are looking forward to key data from the UK PMI and the US, including unemployment claims and durable goods orders.
Despite the significant rise in UK’s government borrowings last month, the GBP/USD pair is expected to move slightly upward during the North American trading session, as the dollar continues to lose ground. Currently, the pair is at 1.3504, gaining 0.12%.
Support for Sterling from US trade agreements
Sterling is benefiting from a recent trade deal with the United States, coming at a challenging time for trade negotiations with major partners like the EU, Canada, and Mexico. These countries were recently sent letters by the White House imposing tariffs of 30% to 35%.
New official data from the UK indicates public sector net borrowing amounted to £20.7 billion in June, surpassing the anticipated £17.1 billion for budget responsibilities. This has led investors to speculate that Prime Minister Rachel Reeves may need to consider tax hikes in her upcoming budget to stabilize finances.
Looking ahead, the UK economic calendar will feature S&P Global Flash PMI for July, which will provide an early insight. Across the Atlantic, housing data, initial jobless claims, and durable goods orders are anticipated to be pivotal.
GBP/USD Price Outlook: Technical Analysis
Currently, GBP/USD displays a neutral perspective, but it suggests signs of recovery as it moves past 1.3500. Still, a closing price above 1.3514 would empower buyers to test resistance at the 20-day SMA around 1.3568. At 1.3600, further opportunities may arise.
Conversely, if daily closes drop below 1.3500, it could lead to trades fluctuating within a range of 1.3400-1.3500 in the near term.
British Pound Performance This Week
The following table highlights the fluctuations in the British pound (GBP) against major currencies this week. Notably, the pound showed strength against the US dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.98% | -0.74% | -1.07% | -0.71% | -0.58% | -0.44% | -1.07% | |
| EUR | 0.98% | 0.32% | -0.09% | 0.25% | 0.37% | 0.36% | -0.13% | |
| GBP | 0.74% | -0.32% | -0.59% | -0.01% | 0.08% | 0.26% | -0.25% | |
| JPY | 1.07% | 0.09% | 0.59% | 0.37% | 0.54% | 0.58% | 0.17% | |
| CAD | 0.71% | -0.25% | 0.01% | -0.37% | 0.19% | 0.27% | -0.41% | |
| AUD | 0.58% | -0.37% | -0.08% | -0.54% | -0.19% | 0.07% | -0.36% | |
| NZD | 0.44% | -0.36% | -0.26% | -0.58% | -0.27% | -0.07% | -0.51% | |
| CHF | 1.07% | 0.13% | 0.25% | -0.17% | 0.41% | 0.36% | 0.51% |
This heatmap illustrates the changes in major currency rates for the week. The base currency can be selected from the left column, while the estimated currency is found along the top row. For example, choosing the British pound from the left and crossing to the US dollar displays the corresponding fluctuation rate in the box.
