Pound Sterling slides below 1.3300 vs. firmer USD on dismal UK data

The GBP/USD pair turns lower for the fourth straight day following an intraday uptick to the 1.3370 area on Friday. The selling bias picks up pace in reaction to mostly disappointing UK macro data, which, along with a broadly firmer US Dollar (USD), drags spot prices below the 1.3300 mark during the early European session.

A report published by the UK Office for National Statistics showed that the economic growth remained flat in January, missing estimates for a 0.2% rise and down from a 0.1% increase recorded in the previous month. Adding to this, monthly Industrial Production declined by 0.2% MoM in January, while Manufacturing Production climbed by 0.1% during the same period. The data weighs heavily on the British Pound (GBP) and drags the GBP/USD pair to the lower boundary of the weekly range.

The USD, on the other hand, continues to gain positive traction and touches a fresh high since late January amid expectations that a war-driven surge in inflation would force the Federal Reserve (Fed) to delay cutting interest rates. Moreover, escalating tensions in the Middle East continue to weigh on investors’ sentiment and benefit the Greenback’s safe-haven status. This turns out to be another factor exerting pressure on the GBP/USD pair and backs the case for a further near-term depreciating move.

Traders now look forward to the release of the US Personal Consumption Expenditures (PCE) Price Index, due later during the North American session. The US economic docket also features Durable Goods Orders, JOLTS Job Openings data, and the Preliminary Michigan Consumer Sentiment and Inflation Index. The focus, however, remains on geopolitical development, which will continue to drive the USD and provide a fresh impetus to the GBP/USD pair heading into the weekend.