The British pound today declined against the US dollar and the euro despite the release of positive UK retail sales data. The British pound rallied higher for a minute or so after the release before retracing all its gains and trending lower.
The GBP/USD currency pair lost over 90 points at the height of its decline today as investors remain bearish towards the pound.
UK retail sales released today by the Office for National Statistics rebounded by a greater margin than expected as they came in at an annualized figure of 3.0% for the month of June as compared to the expected 2.5% increase. The rebound was largely attributed to consumer spending on seasonal items for the warm weather conditions due to the summer. The British pound’s rally was largely negated by negative wage growth reported recently in the UK as investors exercised caution towards the currency.
The pound’s weakness was not correlated to the greenback’s performance given that the US Dollar index was trading below its opening price of 94.77 at the time of writing. However, the DXY was likely to post a recovery after the opening of US markets.
The currency pair’s future performance is likely to be affected by the release of the UK’s public sector net borrowing data and the UK’s public finances for the month of June, both scheduled for tomorrow.
The GBP/USD currency pair was trading at 1.2973 as at 13:26 GMT having declined from a high of 1.3033 earlier today. The EUR/GBP was trading at 0.8911 having risen from a low of 0.8830 prior to the release.
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