British Pound Declines on Weak UK Retail Sales Data, Later Rallies

The British pound today declined against the US dollar following the release of disappointing UK retail sales data in the early European session. However, the pound recovered almost immediately and went on to hit a daily high in the mid-European session, before declining from the early American session.

The GBP/USD currency pair today gained over 80 points to rally from a low of 1.4161 to a high of 1.4246, but was on a downtrend at the time of writing.

The GBP/USD currency pair registered a major decline in the early European session after the release of the UK retail sales data for March by the Office for National Statistics. The core retail sales excluding auto fuel contracted by 0.5% in March translating into an annualized expansion rate of 1.1%, versus the consensus estimate of 1.4% annualized growth. Headline retail sales including auto fuel declined by a monthly 1.2%, which was double the anticipated 0.6% drop. The currency pair later made a technical rebound as US equities pulled back and the US dollar weakened.

The currency pair entered a downtrend in the early American session as the US dollar became stronger despite the release of disappointing initial jobless claims data by the Department of Labor. The pair’s downtrend could be attributed to the speech by the Fed’s Randal Quarles before the Senate Panel.

The currency pair’s future performance is likely to be affected by the Bank of England Deputy Governor Jon Cunliffe‘s speech in Washington scheduled for later today.

The GBP/USD currency pair was trading at 1.4189 as at 16:01 GMT having declined from a daily high of 1.4246. The GBP/JPY currency pair was trading at 152.45 having dropped from a high of 152.95.

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