- GBP/USD is expecting a downside below 1.2060 as the Fed will keep a hawkish stance intact.
- Pessimism in UK economic data has weakened the pound bulls.
- The UK Industrial Production is seldom expected to display an improvement.
The GBP/USD pair has faced selling pressure around 1.2080 and is likely to display more losses on dropping below the major cushion of 1.2060. On a broader note, the cable has auctioned in a 1.2063-1.2138 range for the previous two trading sessions after a modest rebound from a low near the psychological support of 1.2000.
Investors are not finding optimism in the sterling as the preliminary estimate for quarterly Gross Domestic Product (GDP) displays that the economy shrunk in July. The economic data is expected to land at -0.2% vs. 0.8% in the prior release. Also, the annual data is indicating a downward shift to 2.8% against the prior release of 8.7%.
Also, the estimates for Manufacturing Production data are not displaying a rosy picture. The economic data is likely to tumble to 1.3% from the former print of 2.3%. Whereas, Industrial Production is expected to improve to 1.6% in comparison with the former release of 1.4%. Therefore, a broader pessimism in the consensus for UK economic data is keeping the pound bulls on the back foot.
Meanwhile, the US dollar index (DXY) has sensed barricades at around 106.40, however, the upside looks favorable ahead of US Inflation. Despite, a lower consensus for the price pressures at 8.7%, investors believe that a single downward shift is not sufficient for prosperity. A spree of downward print in the US Consumer Price Index (CPI) will scale down troubles for Federal Reserve (Fed) policymakers.