GBP/JPY pulls back after touching 200-day SMA despite better-than-expected UK data.
Analysts still expected the BoE to make rate cuts in 2024.
The Yen gains strength from positive GDP data and expectations of more rate hikes from BoJ.
GBP/JPY pauses in its recovery rally after touching the 200-day Simple Moving Average (SMA) and pulls back almost half a percent on Friday to trade in the 190.60s, despite the release of broadly positive data out of the UK.
The data failed to impact UK 10-year Gilts, however, which remained at 3.9% and revealed bond traders have not altered their inflation expectations after the releases. This, in turn, suggests they see little change in current expectations for UK monetary policy, a major driver of Pound Sterling.
Data out on Friday showed UK Retail Sales rose by 0.5% in July reversing a 0.9% decline in June. UK GDP was flat in June compared to May, and showed 0.6% growth in Q2 compared Q1, as forecast, when the economy grew 0.7%. Industrial and Manufacturing Production, meanwhile, both easily beat expectations month-over-month in June but continued to show declines on a year-over-year basis. Despite the data being overall positive the Pound weakened versus the Japanese Yen (JPY).
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