Pound Rallies on Upbeat UK Retail Sales and Weak US Dollar

The  British pound today rallied higher against the  US dollar following the  release of  the  latest UK retail sales data in  the  early European session, which beat expectations. The  GBP/USD currency pair hit new 2-month highs following today’s releases and  the  weaker US dollar, but remains susceptible to  Brexit headlines.
The  GBP/USD currency pair today rallied from an  Asian session low of  1.3138 to  a 2-month high of  1.3233 in  the  mid-European session.
The  currency pair was in  a  consolidative phase during the  Asian session, but begun rallying higher in  the  early European session as  investor sentiment towards the  Sterling shifted. Th release of  the  upbeat UK retail sales data for  August by  the  Office for  National Statistics further fueled the  pair’s rally to  new highs. Headline retail sales grew by  0.3% in  August, which was quite surprising given the  consensus estimate of  a  0.2% contraction. The  core retail sales also grew by  0.3% versus the  expected 0.3% decline, which translated into an  annualized 3.5%, beating consensus estimates by  a  margin of  1.2%.
Despite the  cable’s current rally, the  pound still remains highly susceptible to  Brexit headlines, which have been a  major driver of  the  action in  the  pair. The  pair also benefited from the  greenback’s weakness as  tracked by  the  US Dollar Index, which hit a  low of  94.23.
The  currency pair’s short-term performance is likely to  be affected by  the  release of  the  Philly Fed Business Outlook and  the  US jobless claims data later today.
The  GBP/USD currency pair was trading at  1.3228 as  at  10:46 GMT having rallied from a  low of  1.3138. The  GBP/JPY currency pair was trading at  148.45 having risen from a  low of  147.34.

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