GBP/USD exchange rate rises despite dismal UK retail sales
The pound US dollar (GBP/USD) exchange rate has managed to trade higher this morning despite the release of some abysmal UK retail sales data.
At the time of writing the GBP/USD exchange rate is trading at around $1.2715, up 0.2% from this morning’s opening rate.
Pound (GBP) to trade without a clear direction?
Today, the pound (GBP) is managing to strengthen against the US dollar (USD) despite the publication of the some below-forecast retail sales data.
The Office for National Statistics (ONS) revealed that UK retail sales fell by 2.3% in April, well below market expectations of a -0.4% reading and significantly behind a previous reading of -0.2%.
The ONS cited heavy rainfall keeping consumers at bay as a primary reason for April’s dire reading, which saw the index come in at a four-month low.
However, despite the dismal reading, the pound managed to stay above ground on Friday as the latest retail data failed to impact current Bank of England (BoE) interest rate cut bets. With the BoE unlikely to cut rates in June, Sterling enjoyed support.
Looking ahead to next week, high-impact domestic data will remain scarce, and as such we may see GBP investors turn to some mid-tier UK data for fresh impetus.
On Tuesday, the latest Confederation of British Industry (CBI) distributive trades survey for May is expected to report a marginal increase, which may serve to underpin Sterling towards the middle of the week.
However, as there will be a significant absence in notable UK data, the pound is likely to struggle to garner investor attention.
Durable goods orders to undermine US dollar (USD)?
The US dollar is wavering this morning, rangebound against the majority of its peers but faltering elsewhere as quiet trading conditions see it surrender some of yesterday’s gains.
Coming up, USD could face more notable losses this afternoon. The latest US durable goods orders are forecast to see a 0.8% decline in April, well below a previous reading of 2.6% in March.
Should the data print as expected and show a contraction in durable goods orders, this could see USD close the week on the back foot.
Furthermore, May’s finalised Michigan consumer sentiment index is also expected to confirm a sharp deterioration in morale, which will likely further stymie the ‘greenback’ during the second half of today’s European session.
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