The dollar rose against most pairs today after the US Federal Reserve re-created strong US economic data expectations for Austerity measures. The movement of the cable pair is primarily driven by the gains at night in the green back. Demand for the US dollar has risen globally due to better-than-expected economic data and concerns about a rapid increase in delta divergent corona virus cases worldwide.

U.S. retail sales rose unexpectedly in August, up 0.7% from the previous month despite expectations of a 0.8% decline, while the Philadelphia Fed’s business sentiment poll also showed a big improvement. Yesterday’s figures helped control the cautious outlook on the U.S. economy after the soft consumer inflation reading and soft job growth data released earlier this month, which helped revive expectations for the early central bank.

Bank of England rate takers may be tempted to vote early next week on their Covid-19 stimulus plans, with a sluggish economy but rising inflation creates a tricky background. Last month, Michael Saunders was the only member of the Monetary Policy Committee to vote on the British central bank’s preliminary decision to buy government securities, based on which continued buying risks further exacerbating monetary policy in the future.

Since then, according to Tutor, BoE Governor Andrew Bailey said four of the eight MPC members who voted last month – including himself – thought some initial conditions had been met to begin exploring the possibility of raising interest rates. They should weigh the data showing that the UK economy unexpectedly fell against the record rise in consumer price inflation last July, a nine-year high of 3.2% – higher than the BoE’s target. While the BoE has said inflation will rise to 4% by the end of this year, rising prices have put more pressure on officials to explain how it plans to remove the stimulus launched last year to help the economy by Covid.

Britain and the United States, on the other hand, are struggling to contain the international backlash over the nuclear submarine deal with Australia, fearing that the alliance could provoke China and provoke conflict in the Pacific. Boris Johnson told MPs that the Aukus Defence Agreement “not intended to be adversarial”. But Beijing accused all three countries of adopting a “Cold War mentality” and warned that it would be detrimental to their interests if it was not abandoned.

As concerns over the pace of global economic recovery mounted, the pound weakened over low investor risk appetite. Meanwhile, Brexit Minister David Frost said on Thursday that the special status accorded to the initial Brexit agreement upholds EU law. The move is expected to exacerbate the ongoing Cold War between the UK and the EU. For now, investors are focusing on UK retail data to gauge market sentiment.

GBP/USD 4 Hour Chart:

Support: 1.3753 (S1), 1.3715 (S2), 1.3665 (S3).

Resistance: 1.3841 (R1), 1.3891 (R2), 1.3929 (R3).

Amidst all these catalysts favoring greenback and weighing on pound.We expect a bearish trend for GBP/USD.