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Aug 24 - 06:55 AM

GBP/USD - COMMENT-GBP/USD Is Having A Typically Bad August

By Martin Miller  —  Aug 24 - 05:40 AM

The British pound usually struggles against the U.S. dollar in August and this looks set to be the case once again this year.

GBP/USD's August performance since 2000 shows it has fallen in 16 of the past 23 years, or 70% of the time.
Seasonality should not be considered in isolation, it needs to be corroborated by other factors.

Britain's economy looks on course to shrink during the current quarter and risks falling into a recession, as S&P Global/CIPS composite PMI on Wednesday showed a slump in factory output and broader weakness in the face of higher interest rates.

The below forecast PMI data caused GBP/USD to slump to 1.2615, before making a strong rebound.
The overall bias remains on the downside, however, as the upside is limited by the thick daily cloud, that currently spans the 1.2726-1.2908 region.
A daily close under the cloud would be an ominous sign and increase the odds of cable ending August in negative territory.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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