The Pound fell to its six-week lows. Overview for 24.03.2021

GBPUSD continues retreating under the attack of the USD and pandemic-related news. 

The British Pound remains weak against the USD on Wednesday after reaching its six-week lows. The current quote for the instrument is 1.3710.

The statistics published by the United Kingdom today turned out to be rather mixed and gave a lot of causes for reflection. For example, the CPI in February was 0.4% y/y after being 0.7% y/y the month before and against the expected reading of 0.8% y/y. The Core CPI was 0.9% y/y after being 1.4% y/y over the same period of time, while maker expectations implied no changes.  

It’s been the biggest drop in inflation in several components, such as clothing and footwear. It appears that the pandemic finally affected this area too and destroyed the standard seasonal behavior of consumers. If social restrictions remain in effect, the Brits won’t need seasonal clothes but require home wear instead, which is not renewed very often. 

Slack demand for clothing, footwear, and several other products will surely influence the retail sales parameters and, probably, the industrial production. That’s bad news.

The PPI Input added 0.6% m/m, the same as expected. The PPI Output also added 0.6% m/m, which is better than expected. 

Later today, the United Kingdom will report on the HPI for February, as well as the Manufacturing and Services PMIs for March.