GBP/USD flatlines in 1.3030s despite weak UK data, with key upcoming UK/US data eyed

• GBP/USD has flatlined in the 1.3030s on Monday despite weak UK GDP figures, as traders eye upcoming risk events.
• A rise in UK yields relative to their US counterparts is helping support the pair despite risk-off flows elsewhere.

Weaker than expected February UK GDP growth figures did not have a lasting impact on GBP/USD, which continues to trade sideways in the 1.3030 area, with the pair finding support in the form of last week’s sub-1.3000 lows. Last week’s lows marked the first time that cable had traded sub-1.30 since November 2020. GBP/USD’s resilience at the start of the week is somewhat surprising given the drop seen in global equities as a result of geopolitical/China lockdown worries. Normally a drop in other risk assets weighs on pound sterling.

GBP/USD is likely finding support from a jump in domestic UK yields, which are tracking their continental counterparts higher, narrowing the US/UK rate differential. Subdued trading conditions may also have something to do with caution ahead of an upcoming barrage of UK and US risk events. First up, a few Fed policymakers are expected to give remarks later on Monday’s session and it should be a busy week for Fed speak thereafter.

But the most important events for GBP/USD traders to monitor this week are economic data releases. UK jobs data is released on Tuesday ahead of the release of US Consumer Price Inflation figures, followed by UK Consumer Price Inflation and US Producer Price Inflation numbers on Wednesday. Focus remains on the US with the release of the latest Retail Sales report on Thursday, ahead of a UK public holiday on Friday, where trading conditions should be much quieter.