The British pound is slightly lower on Friday. GBP/USD is trading at 1.2636 early in the North American session, down 0.17% on the day.
UK Retail Sales hit four-month high
UK retail sales jumped 2.9% m/m in May, an impressive turnaround from the revised 1.8% decline in April and blowing past the market estimate of 1.8%. This was the highest level since January. Yearly, retail sales climbed 1.3%, rebounding from a revised 2.3% drop in April and above the market estimate of -0.9%. This marked the sharpest gain since March 2022.
The increase in consumer spending was felt across the economy, as rising wages have helped consumers withstand weak economic growth and high interest rates. The weather was a key factor, as a very wet April dampened retail sales, which rebounded in what was the warmest May on record.
UK GfK Consumer Confidence rose to -14 in June, up from -17 in May and above the market estimate of -17. Consumers remain pessimistic but the confidence indicator has climbed for three straight months and hit its highest level since November 2021.
The Bank of England stayed on the sidelines on Thursday, keeping the benchmark rate of 5.25% unchanged for an eighth straight time. The BoE upgraded its growth forecast for the second quarter and that could mean an August rate cut, which would be the first cut since the BoE embarked on its steep rate-hike cycle to tame high inflation.
Earlier in the week, inflation dropped to 2%, the BoE’s target, for the first time in almost three years. The fly in the ointment is that service inflation is running at 5.7% and will have to come down before the BoE cuts rates.
GBP/USD technical
-
GBP/USD is testing support at 1.2633. Below, there is support at 1.2608.
-
There is resistance at 1.2679 and 1.2704.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
AUD/USD: Extra gains need to clear 0.6700
AUD/USD managed to leave behind Tuesday’s pullback despite the stronger Dollar and on the back of the tighter-for-longer narrative surrounding the RBA, particularly amidst still elevated inflation in Australia.
EUR/USD: There is no light at the end of the tunnel yet
EUR/USD retreated further and slipped back to the proximity of 1.0660, or multi-week lows, in response to the intense move higher in the Greenback and hawkish Fedspeak.
Gold battles to retain the $2,300 mark
Gold stays under bearish pressure and trades below $2,300 for the first time in two weeks on Wednesday. The benchmark 10-year US Treasury bond yield clings to strong gains near 4.3% on hawkish Fed commentary, causing XAU/USD to stretch lower midweek.
Dogwifhat price breakout signals potential rally above $2.1 resistance
Dogwifhat (WIF) price broke out of a descending trendline on Tuesday and is trading above $2 as of Wednesday. On-chain data reveals that the largest whale has accumulated 2.3 million tokens valued at $4.67 million.
Japanese Yen at 38 year lows - Where is the bottom?
In this video: We look VERY long term charts for key levels. Why the Japanese Yen is weak. When will USD/JPY intervention happen. How to trade intervention.