GBP/USD: Both US & UK Retail Sales Impress

The pound pushed higher versus the US dollar for a third straight session on Thursday. The pound US dollar exchange rate rallied to a high of US$1.3083 before easing slightly to close up 0.3% on the day at US$1.3075.

The pound advanced on Thursday despite fears of an imminent interest rate cut by the Bank of England. Data this week has been dismal with inflation unexpectedly dropping to a three-year low and UK GDP showing the economy unexpectedly contracted -0.3% in November. Muted inflation, well below the BoE 2% target and sluggish economic growth is a recipe for a rate cut.

BoE policy makers have also been sounding increasingly dovish this week. If UK economic data doesn’t pick up in the coming two weeks, then the BoE are likely to cut the interest rate from 0.75% to 0.5%. on 30th January.

Today, in the absence of any Brexit headlines, pound investors will remain focused on the UK economic calendar with the release of UK retail sales. Analysts are expecting a bumper reading because the data will include the Black Friday / Cyber Monday weekend. Retail sales have been on a downward trend, falling for the past 4 months. Today’s reading is expected to be a one off at 0.6% month on month growth, compared to the -0.6% decline in November.

US Retail Sales Climb Again In December

The US dollar traded broadly higher versus its peers in the previous session, just below the pound. The dollar gained, reversing losses from earlier in the week, as multiple data releases painted a positive picture of the US economy.

US retail sales increased for a third straight month in December, up 0.3% month on month. Core retail sales, which strips out more volatile items, was up a better than expected 0.5%. Solid job creation, 2.9% wage growth and consumer confidence at the highest level since May, meant that households spent well across December. Strong retail sales are an encouraging sign for the US consumer driven economy.

Today data will remain under the spotlight with the release of US industrial production, housing starts and consumer confidence data.


What do these figures mean?
When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute.

For example, it could be written:

1 GBP = 1.28934 USD

Here, £1 is equivalent to approximately $1.29. This specifically measures the pound’s worth against the dollar. If the US dollar amount increases in this pairing, it’s positive for the pound.

Or, if you were looking at it the other way around:

1 USD = 0.77786 GBP

In this example, $1 is equivalent to approximately £0.78. This measures the US dollar’s worth versus the British pound. If the sterling number gets larger, it’s good news for the dollar. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.