Ella 
GBP/USD remained under pressure and closed lower for the fourth consecutive week. The pair is currently trading around 1.2665, down 0.23% on the day. Upbeat UK data failed to lift the pound as investors worried that further rate hikes could affect the UK economy.
Last Friday, the UK’s GDP in June unexpectedly increased by 0.5% month-on-month, the market consensus was 0.2%, and the previous value fell by 0.1%. In addition, the UK’s industrial output in June increased by 1.8% month-on-month, which was higher than market expectations of 0.1% and the previous value fell by 0.6%. Finally, manufacturing output increased by 2.4% month-on-month, better than market expectations of 0.2% and the previous value fell by 0.1%.
Strong UK economic data increased the chances of further interest rate hikes by the Bank of England. Market participants, however, remained cautious about the Bank of England’s actions given the weak economy and interest rates at a 15-year high of 5.25 percent. Aggressive monetary policy could have a negative impact on the UK economy. However, UK inflation data and wage data will be released this week, which will provide a hint of what the Bank of England will decide at its next meeting.
In terms of the US dollar, the July PPI announced by the US Labor Bureau last Friday increased by 0.8% year-on-year, compared with the previous value of 0.1%. 0.7% higher than market expectations. In addition, the University of Michigan’s consumer confidence index fell from 71.6 to 71.2 in July, expecting 71. The last five-year inflation rate in August is expected to drop to 2.9%, compared with the previous value and forecast of 3.0%.
UK jobless claims for July, CPI and retail sales will be released this week. On the other hand, investors will be watching US retail sales, FOMC meeting minutes and comments from Fed officials for clues and guiding GBP/USD.
