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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