The Great Britain pound extended its decline this week as macroeconomic data became significantly less positive than it was before. Poor fundamentals led to the second weekly decline of the currency against the US dollar and the euro. The Japanese yen was even weaker than the sterling and fell versus Britain’s currency.
The stream of positive reports from the United Kingdom ended, removing support for the sterling. Manufacturing productions was especially bad, leading to a slump on Wednesday. The construction report, released by the end of the week, added to negative data. The Bank of England left its monetary policy unchanged, neither helping nor hindering the currency.
The issue of the US budget and debt ceiling remains unresolved. Yet there are hopes that a temporary agreement will be reached soon, perhaps even this weekend. Otherwise, the United States will face a default next week.
GBP/USD slid from 1.6021 to 1.5956 after rising to 1.6123 during the week. EUR/GBP advanced from 0.8464 to 0.8490 following the drop to 0.8424. GBP/JPY jumped from 155.73 to 157.23, bouncing from the weekly low of 154.70.
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