GBP/USD slips again as UK production data disappoints
- UK Manufacturing Production fell 0.1% MoM and 0.5% YoY in February, offsetting a 0.5% MoM GDP beat and capping Sterling.
- Doubts over Trump's Iran deal and Israel-Lebanon ceasefire claims kept safe-haven flows supportive of the US Dollar.
GBP/USD gave up recent gains on Thursday, falling around 0.25% to settle close to 1.3525 after slipping back below the 1.3550 handle. Price drifted lower through the European and North American sessions in a steady grind rather than an impulsive move, with sellers leaning against intraday rallies. The pullback unwinds a portion of the rebound that followed Wednesday's spike toward 1.3600, with candle structure showing persistent supply on bounces.
UK economic data came in mixed. Gross Domestic Product (GDP) rose 0.5% MoM in February against a 0.1% consensus, and the Index of Services printed 0.5% against 0.3% expected. However, Manufacturing Production slipped 0.1% MoM and contracted 0.5% YoY, missing forecasts on both reads, while Industrial Production YoY came in at negative 0.4% against a negative 0.9% consensus. The factory-sector softness offset the GDP beat and left Pound Sterling without a clear tailwind. Bank of England (BoE) Taylor is scheduled to speak twice in the London afternoon and evening.
Dollar-side drivers center on the Iran conflict that began with US-led strikes at the end of February. President Trump renewed claims on Thursday that the US is close to a deal with Iran to end the conflict, alongside announcing a forthcoming Israel-Lebanon ceasefire, though markets remain skeptical that either is as close as advertised. The continued closure of the Strait of Hormuz, which now includes a US-backed blockade, is raising fears that sustained disruption to global energy supply will drive a fresh leg of inflation pressure in the coming weeks, keeping safe-haven flows broadly supportive of the Greenback.
GBP/USD 15-minute chart
Technical Analysis
In the fifteen-minute chart, GBP/USD trades at 1.3525. The pair holds a mild bearish intraday bias as price continues to track beneath the day’s open at 1.3571, keeping recent downside pressure intact despite the latest attempt to stabilize around the 1.3520–1.3530 band. The Stochastic RSI has eased back toward mid-range at 46.19 after earlier overbought readings, suggesting waning upside momentum and leaving the pair vulnerable to renewed selling if recovery attempts fail to extend.
On the downside, a clean break beneath the immediate 1.3520 area would expose the recent lows around 1.3520/1.3522 and then the psychological 1.3500 region, where buyers may look to regroup. On the topside, initial intraday recovery attempts would likely struggle toward the day’s open at 1.3571, and only a sustained move above that level would start to ease the current bearish tone on this short-term timeframe.
In the daily chart, GBP/USD trades at 1.3526, extending a constructive near-term tone above both the 50-day and 200-day exponential moving averages (EMAs), which sit near 1.3412 and 1.3354 respectively. This positioning keeps the broader bias bullish, although the Stochastic Relative Strength Index at an overbought 94.6 hints that upside momentum is stretched and that the pair could be vulnerable to a corrective pause rather than a sustained acceleration higher in the very short term.
On the downside, initial support emerges at the 50-day EMA around 1.3412, with the 200-day EMA near 1.3354 providing a deeper structural floor if sellers gain traction. As long as spot holds above these EMAs on closing bases, pullbacks are likely to be treated as corrective within the prevailing uptrend, while any loss of the 200-day EMA would significantly weaken the current bullish outlook.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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