The Sterling pound today crashed against the US dollar in the early London session following the release of the disappointing latest UK retail sales report. The GBP/USD currency pair had been trading higher before the release boosted by upbeat investor sentiment before nosediving to its daily lows after the announcement.
The GBP/USD currency pair today fell from a high of 1.3118 to a low of 1.3040 after the retail sales report and was trading near these lows at the time of writing.
The currency pair traded sideways during the Asian session before rallying higher in the early London session. However, the pair’s rally was short-lived after the Office for National Statistics released the UK retail sales data for December, which missed expectations by a large margin. The headline retail sales contracted by 0.6% versus the expected 0.7% expansion, while the core retail sales print came in at -0.8% missing consensus estimate set at 0.5%. The cable’s decline was also fueled by rising expectations that the Bank of England is going to cut interest rates at its next monetary policy meeting.
The greenback’s rally as tracked by the US Dollar Index, which hit a high of 97.49 also contributed to the pound’s fall. Escalating tensions between the US and Iran over the recent killing of Iran’s top military commander also dampened investor risk sentiment boosting the greenback.
The currency pair’s future 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 1.3038 as at 11:23 GMT having fallen from a high of 1.3118. The GBP/JPY currency pair was trading at 143.58 having dropped from a high of 144.52.
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