- GBP/USD Holds on to early gains after the UK retail sales numbers.
- The US dollar selling bias helps the pair.
- UK flash PMI eyed for further direction.
The GBP/USD traded flat around 1.3240-50 after the release of the upbeat UK sales figures, holding on to the gains made early in the day. The pair’s start-of-the-day strength was in continuation of its 150 pips bounce yesterday from the weekly lows around 1.3065.
The fresh selling in the dollar after the FOMC-bounce helped the pair to rally back even before the better-than-expected UK Retail Sales figures.
Headline sales came in with a growth of 3.6 Percent in July, beating the two Percent increase expected by the market. The core retail sales – excluding fuel sale -beat the consensus of 0.2 Percent, by jumping two Percent in July.
The UK retail sales on an annualized basis stood at 1.4 Percent in July compared to a flat reading consensus; core retail sales rose 3.1 Percent – another surprising number for the traders.
US dollar bears tightened their grip, as the economy worries gained strength after the US Initial-Jobless-Claims spiked above one million in a weekly report.
FOMC meeting minutes earlier to this had also shared worries about the hiring slowdown.
The greenback has another paint point in the uncertainty over the next round of fiscal stimulus. The stimulus is dependent on the passage of the bill now stuck in a political jam in the US Congress.
GBP/USD might strengthen further as these worries play out in the US dollar. The pair now waits for the flash version of the UK PMI prints for further action.