Pound Falls on Weak UK Retail Sales Data and Risk-Off Sentiment

The  Sterling pound today fell against the  US dollar following the  release of  disappointing UK retail sales data in the early London session. The GBP/USD currency pair’s decline was further fueled by the risk-off market sentiment as investors priced-in various global risks.
The  GBP/USD currency pair today fell from a  high of  1.2233 in  the  Asian session to  a  low of  1.2191 after the  release and  was headed lower at  the  time of  writing.
The  currency pair initially remained stable after the  UK’s Office for  National Statistics releases the  latest retail sales figures. The  headline retail sales print came in  at  -18.1% versus the  expected -16%, while the  core print was recorded at  -15.2% as  compared to  the  consensus estimate of  -15%. However, the  pair later crumbled and  headed lower breaking the  crucial 1.22 support level, which allowed it to  keep falling. The  UK’s latest public sector net borrowing report also did not help the  pair as  the  print came in  at  61.4 billion versus the  consensus estimate of  35 billion.
Dovish comments in  support of  negative rates by  Dave Ramsden, a  Deputy Governor at  the  Bank of  England combined with investor fears of  a  second wave of  COVID-19 infections also drove the  pair lower.
The  rising demand for  safe-haven assets such as  the  US dollar also contributed to  the  pair’s decline as  the  US Dollar Index hit a high of 99.74 today. The worsening relations between the  US and  China further dampened investor risk appetite.
The  currency pair’s future performance is likely to  be affected by  geopolitical events.
The  GBP/USD currency pair was trading at  1.2172 as  at  07:44 GMT having fallen from a  high of  1.2233. The  GBP/JPY currency pair was trading at  130.76 having dropped from a  high of  131.78.
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