GBP to USD Exchange Rate softer as US retail sales data hit best level since 2012

The Pound to US Dollar (GBP/USD) Exchange Rate softened on Monday following the release of stronger-than-expected retail sales data, and as tensions in the Ukraine increased demand for the safe haven ‘Greenback’.

Sterling found support early in the session from a report released over the weekend which showed that UK house prices climbed to their highest levels on record this month. A separate report showed that wages are expected to surpass inflation for the first time in six years.

The US Dollar pushed higher in the afternoon after data showed that retail sales in the United States increased more-than-forecast in March, suggesting that the world’s largest economy is shaking off the impact of harsh winter weather.

According to the Washington based Commerce Department sales increased by 1.1%, exceeding expectations for a rise of 0.9%. Sales excluding fuel climbed to the strongest level in four-years.

“January and part of February were affected by weather. Now we are seeing things are bouncing going into spring,” said the chief economic strategist at Tennessee based Vining Sparks.

Economists expect that overall economic growth slowed in the first quarter of the year due to the winter conditions, but forecast that there will be a strong rebound in the second quarter as spring turns into summer.

The ‘Greenback’ has also been receiving support from increased demand for safer assets as the situation in Ukraine deteriorates. Clashes between pro-Russian gunmen and Ukrainian troops resulted in the death of one soldier and the wounding of several others over the weekend. The U.S. has indicated that it is prepared to impose more sanctions against Moscow if Russian encroachments in eastern Ukraine continue.

US Dollar (USD) Exchange Rates