{"id":4028,"date":"2017-10-27T00:00:00","date_gmt":"2017-10-27T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100202-gbp-usd-low-uk-retail-sales\/"},"modified":"2017-10-27T00:00:00","modified_gmt":"2017-10-27T04:00:00","slug":"100202-gbp-usd-low-uk-retail-sales","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100202-gbp-usd-low-uk-retail-sales\/","title":{"rendered":"GBP\/USD: Pound Sinks Lower With Low UK Retail Sales, US GDP Moves into"},"content":{"rendered":"<p>Renewed concerns over the health of the UK economy sent the pound southwards on Thursday, whilst a weak euro boosted the US dollar. Consequently, the pound US dollar exchange rate plunged 0.7% to a low of US$1.3162, wiping out most of sterling\u2019s gains from Wednesday\u2019s session.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>What do these figures mean? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>\n<p> 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. <\/p>\n<p> For example, it could be written: <em>1 GBP = 1.28934 USD<\/em> <\/p>\n<p> <em>Here, \u00a31 is equivalent to approximately $1.29. This specifically measures the pound\u2019s worth against the dollar. If the US dollar amount increases in this pairing, it\u2019s positive for the pound.<\/em> <\/p>\n<p> Or, if you were looking at it the other way around: <em>1 USD = 0.77786 GBP<\/em> <\/p>\n<p> <em>In this example, $1 is equivalent to approximately \u00a30.78. This measures the US dollar\u2019s worth versus the British pound. If the sterling number gets larger, it\u2019s good news for the dollar.<\/em> <\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>Sentiment towards the pound slid again in the previous session. Data from the Confederation of British Industry (CBI) showed that UK retail sales dropped sharply lower in October. The CBI survey showed that the largest percentage of retailers reported falling sales in October since 2009. This is just the latest in a string of evidence which indicates that rising prices and sluggish wages are squeezing the UK consumer. As a result, British households are spending less, and reprioritizing their spending away from non-essential items and towards essential items.<\/p>\n<p>Retail sales data does have a tendency to be volatile, but this weakness has now been evident across a couple of months. This suggests that a significantly weaker trend is being established.<\/p>\n<p>The weak data is concerning for retailers as Christmas quickly approaches. It\u2019s also concerning investors who believe that the Bank of England (BoE) may hold back on an interest rate rise next week given the loss of momentum in the economy. As the markets\u2019 perceived odds of an interest rate decreased, so did the value of the pound.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why do raised interest rates boost a currency\u2019s value? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Interest rates are key to understanding exchange rate movements. Those who have large sums of money to invest want the highest return on their investments. Higher interest rate environments tend to offer higher yields. So, if the interest rate or at least the interest rate expectation of a country is relatively higher compared to another, then it attracts more foreign capital investment. Large corporations and investors need local currency to invest. More local currency used then boosts the demand of that currency, pushing the value higher. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>Today there \u2018s no influential UK economic data. Pound investors will look ahead to next week\u2019s BoE monetary policy meeting and interest rate decision next Thursday.<\/p>\n<h2><a href=\"#will-us-third-quarter-gdp-impress-\" name=\"will-us-third-quarter-gdp-impress-\"><\/a>Will US third quarter GDP impress?<\/h2>\n<p>The dollar was in demand on Thursday thanks in part to investors selling out of the euro. When European Central Bank President (ECB) Mario Draghi disappointed the market with his conservative message, the euro tanked versus most of its peers. Meanwhile, the dollar soared as these investors who sold out of the euro looked towards the dollar as a suitable alternative investment.<\/p>\n<p>Investors will now look towards today\u2019s US GDP data. Analysts are forecasting that the US economy will have grown by 2.6% on an annualised basis. This would represent a slight easing back from growth of 3.1% in the second quarter. However it\u2019s still an encouraging number and, if reached, could boost the dollar further.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why does strong economic data boost a country\u2019s currency? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Solid economic indicators point to a strong economy. Strong economies have strong currencies because institutions look to invest in countries where growth prospects are high. These institutions require local currency to invest in the country, thus increasing demand and pushing up the money\u2019s worth. So, when a country or region has good economic news, the value of the currency tends to rise. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<table class=\"table table-bordered\">\n<tbody>\n<tr>\n<td>\n<p><small><em><br \/>\nThis publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Inc., Currency Live or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. Consult our <a href=\"https:\/\/currencylive.com\/risk-warning\/\">risk warning<\/a> page for more details.<\/em><\/small><\/p>\n<p><small><em>This article was initially published on TransferWise.com from the same author. The content at Currency Live is the sole opinion of the authors and in no way reflects the views of TransferWise Inc.<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Renewed concerns over the health of the UK economy sent the pound southwards on Thursday, whilst a weak euro boosted the US dollar. Consequently, the pound US dollar exchange rate plunged 0.7% to a low of US$1.3162, wiping out most of sterling\u2019s gains from Wednesday\u2019s session. What do these figures mean? When measuring the value [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4029,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379,1381],"tags":[1394,1398],"class_list":["post-4028","post","type-post","status-publish","format-standard","has-post-thumbnail","category-gbp","category-usd","tag-gbp","tag-usd"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>GBP\/USD: Pound Sinks Lower With Low UK Retail Sales, US GDP Moves into - Currency Live<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/currencylive.com\/news\/100202-gbp-usd-low-uk-retail-sales\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Fiona Cincotta\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100202-gbp-usd-low-uk-retail-sales\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100202-gbp-usd-low-uk-retail-sales\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Pound Sinks Lower With Low UK Retail Sales, US GDP Moves into\",\"datePublished\":\"2017-10-27T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100202-gbp-usd-low-uk-retail-sales\\\/\"},\"wordCount\":832,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100202-gbp-usd-low-uk-retail-sales\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100202-gbp-usd-low-uk-retail-sales.jpg\",\"keywords\":[\"gbp\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2017\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100202-gbp-usd-low-uk-retail-sales\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100202-gbp-usd-low-uk-retail-sales\\\/\",\"name\":\"GBP\\\/USD: Pound Sinks Lower With Low UK Retail Sales, US GDP Moves into - 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