The Great Britain pound fell at the first half of today’s trading session as another set of poor economic indicators was released. Yet the currency managed to bounce in the second half, trimming its losses against the euro and gaining on the US dollar and the Japanese yen.
It looks like the sterling intends to keep its strength, making economists concerned. Strong currency is not necessarily what the recovering economy of the United Kingdom needs right now, and there is a possibility that the pound’s rally will hurt economic recovery. This means that the higher the currency goes the deeper the eventual drop should be.
Indeed, the latest economic reports confirmed that the recovery is struggling. The Shop Price Index of British Retail Consortium fell 1.8 percent in June, demonstrating the biggest deflation since the data series started in December 2006. The Halifax House Price Index dropped 0.6 percent in June, more than was expected by analysts.
GBP/USD advanced from 1.7130 to 1.7154 as of 22:58 GMT today after falling to 1.7094. GBP/JPY was up from 173.98 to 174.29. EUR/GBP went up from 0.7945 to 0.7951 but retreated from the daily high of 0.7963.
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