Pound Crashes on Weak UK Retail Sales Report and US-Iran Tensions

The  Sterling pound today crashed against the  US dollar in  the  early London session following the  release of  the  disappointing latest UK retail sales report. The  GBP/USD currency pair had been trading higher before the  release boosted by  upbeat investor sentiment before nosediving to  its daily lows after the  announcement.
The  GBP/USD currency pair today fell from a  high of  1.3118 to  a  low of  1.3040 after the  retail sales report and  was trading near these lows at  the  time of  writing.
The  currency pair traded sideways during the  Asian session before rallying higher in  the  early London session. However, the  pair’s rally was short-lived after the  Office for  National Statistics released the  UK retail sales data for  December, which missed expectations by  a  large margin. The  headline retail sales contracted by  0.6% versus the  expected 0.7% expansion, while the  core retail sales print came in  at  -0.8% missing consensus estimate set at  0.5%. The  cable’s decline was also fueled by rising expectations that the  Bank of  England is going to  cut interest rates at  its next monetary policy meeting.
The  greenback’s rally as  tracked by  the  US Dollar Index, which hit a  high of  97.49 also contributed to  the  pound’s fall. Escalating tensions between the  US and  Iran over the  recent killing of  Iran’s top military commander also dampened investor risk sentiment boosting the  greenback.
The  currency pair’s future performance is likely to  be affected by  the  release of  the  University of  Michigan consumer sentiment survey later today.
The GBP/USD currency pair was trading at 1.3038 as at 11:23 GMT having fallen from a high of 1.3118. The GBP/JPY currency pair was trading at 143.58 having dropped from a high of 144.52.

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