GBP/USD struggles around 1.2200 ahead of UK GDP data

• GBP/USD is facing barricades around 1.2200 as investors await UK GDP data.
• A vulnerable UK GDP will accelerate troubles for the BOE.
• Higher Initial Jobless Claims have supported the DXY at lower levels.

The GBP/USD pair is hovering around the immediate hurdle of 1.2200 after a modest rebound from 1.2185. The asset defended Wednesday’s low at around 1.2180 but is now displaying a torpid rebound, which could be fragilized effortlessly by the market participants. The cable is expected to remain subdued as investors are awaiting the release of the Gross Domestic Product (GDP) data. Apart from that, the release of the Industrial Production and Manufacturing Production data holds utmost importance.

As per the market consensus, the UK economy has shrunk by 0.2% in the second quarter of CY2022 vs. the expansion of 0.8% recorded in Q1CY22. Also, the annual data is expected to shift lower to 2.8% from the prior release of 8.7%. An occurrence of the same is likely to create more troubles for the Bank of England (BOE). The central bank is already stuck in the laborious job of dealing with ramping up inflation and over that, a slump in growth rates will restrict the BOE to combat price pressures with full power.

Adding to that, the Manufacturing Production data is also expected to display a vulnerable performance. The economic data is expected to slip lower to 0.9% against the former release of 2.3% on an annual basis. Adding to that, the monthly data is expected to display a de-growth of 1.8% against the previous print of 1.4%.

Whereas the Industrial Production data is seen higher by 20 basis points on yearly basis but the monthly culture is likely to land in negative territory.

On the dollar front, the US dollar index (DXY) defended the downside bias confidently and now, has advanced to near 105.20. Printing of higher jobless claims by the first-timers supported the DXY from refreshing its monthly lows. The economic data landed at 262k, mostly in line with the expectations but lower than the prior release of 248k.