{"id":4298,"date":"2018-02-02T00:00:00","date_gmt":"2018-02-02T05:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100342-gbp-usd-uk-retail-sales\/"},"modified":"2018-02-02T00:00:00","modified_gmt":"2018-02-02T05:00:00","slug":"100342-gbp-usd-uk-retail-sales","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100342-gbp-usd-uk-retail-sales\/","title":{"rendered":"GBP\/USD: Pound Holds Steady Vs Dollar Following Retail Sales Data"},"content":{"rendered":"<p>The pound experienced a heavy sell off versus the US dollar in early trade on Tuesday. The pound dived over 100 points, only to claw back the gains later in the day. Concerns over the health of the UK economy and potential higher interest rates in the US were key factors on Tuesday.<\/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>The pound initially sold off versus the dollar after the release of weaker than forecast data from the British Retail Consortium. Retail sales in the UK increased 0.6%, which was a solid performance and ahead of December\u2019s decline of 0.1%. However, the figure still missed analyst expectations of an increase of 0.7%. After weaker data at the end of last week and the beginning of this week, and ahead of the Bank of England announcement on Thursday, pound traders are particularly sensitive to UK economic data missing forecasts.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why does poor economic data drag on a country\u2019s currency? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Slowing economic indicators point to a slowing economy. Weak economies have weaker currencies because institutions look to reduce investments in countries where growth prospects are low and then transfer money to countries with higher growth prospects. These institutions sell out of their investment and the local currency, thus increasing supply of the currency and pushing down the money\u2019s worth. So, when a country or region has poor economic news, the value of the currency tends to fall. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>Today is expected to be another quiet day for pound traders with no high impacting releases and so far relatively tame Brexit headlines from the most recent round of Brexit talks. Market participants will be waiting cautiously ahead of the Bank of England\u2019s \u201cSuper Thursday\u201d. This is when the central bank releases the interest rate decision, the minutes to the monetary policy meeting and the quarterly inflation report. A substantial amount of information for investors to sink their teeth into.<\/p>\n<p>Whilst the BoE are expected to keep rates on hold this month, investors will be watching carefully for any signs that the central bank could be more aggressive in their approach to monetary policy.<\/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<h2><a href=\"#trump-fails-to-bring-trade-deficit-lower\" name=\"trump-fails-to-bring-trade-deficit-lower\"><\/a>Trump Fails To Bring Trade Deficit Lower<\/h2>\n<p>The US trade deficit, grew 12.1% to $53.1 billion in Trump\u2019s first year as President. Analysts had been expecting it to grow to just $52.1 billion. This data suggests that Trump has made little progress in his attempt to rewrite the US trading relationship with the rest of the world. The rise in trade deficit, is mainly down to a strengthening domestic economy, increasing the demand for imported goods, rather than anything more sinister. In weakening economies, a falling trade deficit could be a warning sign, but that isn\u2019t the case with the US right now.<\/p>\n<p>Today could potentially see another quiet day for the dollar. Fed speakers hitting the airwaves later in the day could provide some volatility should they give away any further clues as to the number of rate rises that investors could expect this year from the Fed.<\/p>\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>The pound experienced a heavy sell off versus the US dollar in early trade on Tuesday. The pound dived over 100 points, only to claw back the gains later in the day. Concerns over the health of the UK economy and potential higher interest rates in the US were key factors on Tuesday. What do [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4299,"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-4298","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 Holds Steady Vs Dollar Following Retail Sales Data - 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\/100342-gbp-usd-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\\\/100342-gbp-usd-uk-retail-sales\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100342-gbp-usd-uk-retail-sales\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Pound Holds Steady Vs Dollar Following Retail Sales Data\",\"datePublished\":\"2018-02-02T05:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100342-gbp-usd-uk-retail-sales\\\/\"},\"wordCount\":872,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100342-gbp-usd-uk-retail-sales\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100342-gbp-usd-uk-retail-sales.jpg\",\"keywords\":[\"gbp\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2018\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100342-gbp-usd-uk-retail-sales\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100342-gbp-usd-uk-retail-sales\\\/\",\"name\":\"GBP\\\/USD: Pound Holds Steady Vs Dollar Following Retail Sales Data - 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