GBP/USD seen pressured under $1.3550 as UK economy stagnates in July

British pound plunged on Friday after data showed UK economy remained stagnant in July after rising by 0.4% in June. The dominant services sector expanded 0.1% and construction grew 0.2%. Meanwhile, industrial production fell 0.9%. On a yearly basis, GDP was up 1.4% in July, slightly slower than the forecast of 1.5 percent. Meanwhile, month-on-month manufacturing production has declined by 1.3%, while it was expected to remain flat after rising by 0.5% in June. The industrial production has contracted by 0.9% on monthly basis which was also expected to remain flat. Another report from the ONS showed that the visible trade deficit remained broadly unchanged in July.

Thus, rising economic concerns in the UK could add pressure on BoE for further rate cuts that is weighing on the British currency. Besides, dollar index holding gains ahead of the release of the University of Michigan consumer sentiment Index due later today is also adding pressure on the counter. GBP/USD is currently quoting at $1.3539, down 0.32% on the day. On the NSE, GBPINR futures are trading marginally higher at 119.72.

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