Pound Declines on Weak UK Retail Sales and US Housing Data

The British pound today declined against the US dollar following the release of weak UK retail sales data for January. The pound further weakened against the greenback after the release of better than expected US housing data in the early American session.

The GBP/USD currency pair today declined by over 130 points from a high of 1.4145 to trade at a low of 1.4008 at the time of writing.

The pound rallied higher during the Asian session, but entered into a downtrend late in the Asian session and into the early European session. The release of the UK retail sales data for January by the Office for National Statistics accelerated the pair’s decline. The core retail sales data came in at 1.5% on an annualized basis, which was lower than the expected 2.4% print. The headline retail sales figure expanded by 0.1% in January versus the expected 0.5% growth.

The release of the US housing starts data for January by the Census Bureau also contributed to the pair’s decline. The housing starts recorded a 9.7% increase on a monthly basis versus the consensus estimate of 3.5% growth. The building permits data also exceeded expectations by coming in at 7.4% versus the expected zero growth. The US import price index released by the Bureau of Labor Statistics also beat expectations, thus, contributing to the decline.

The currency pair’s short-term 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 1.4019 as at 14:36 GMT having dropped from a daily high of 1.4145. The GBP/JPY currency pair was trading at 149.12 having declined from a high of 149.95 earlier today.

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