FX round-up: Slide in UK consumer confidence knocks cable lower

Sterling fell on worse than expected UK consumer confidence data Friday morning, and -- even noting the more hawkish tones from Bank of England bosses -- was unable to recover.

At 16:04 BST, the British currency was down 0.14% to $1.2989. It was also down on the loonie and kiwi, but up on the rand and yen. It gained 0.18% to €1.1389.

David Madden at CMC Markets UK said GBPUSD slid on news UK consumer confidence ebbed in June, with UK gross-domestic product (GDP) data also a factor.

GfK's consumer confidence index for UK in May fell to -10, which was far worse than the -7 expected by the market.

UK GDP grew 0.2% in the first quarter, a final read by Office for National Statistics showed. This was as expected, and down sharply from 0.7% at end-2016.

Rising inflation, sluggish wage growth, election and Brexit concerns were underlying factors in the data.

However, Madden noted sterling had surrendered only a small portion of its greenback gains of the past five trading sessions.

He cited hawkish commentary from BoE members this week as still being on traders' minds.

"Mark Carney, the head of the Bank of England, announced that some of the stimulus could be withdrawn, and (chief economist) Andy Haldane reiterated his hawkish views yesterday."

FXTM's Lukman Otunuga said he believed sterling upside to be limited in the longer term as investors came to grips with the realities of Brexit.

"From a technical standpoint, sterling is undeniably bullish on the daily charts with buyers in firm control above $1.2775," said Otunuga.

"A technical correction could be on the cards with the formation of a new higher lower creating a stepping stone for bulls to attack the $1.3000 resistance once again."

Meanwhile, the dollar-spot index was up 0.12% to $95.746, with the greenback advancing on the euro, aussie, rand and yen, but falling on the kiwi and loonie.

"The increasingly hawkish comments from central banks outside of the US have eroded the greenback's allure," said Otunuga.

"Investors seem to be keeping a safe distance from the dollar amid signs of decelerating growth in the US," he added.

"Political instability in Washington continues to raise questions over Trump's ability to move forward with his pro-growth agenda."

Otunuga added that the technical view suggested the dollar-spot index remained heavily bearish on the daily charts with repeated weakness below $95.50 opening a path towards $94.00.