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British Pound pulls back as solid US data revives the Greenback

  • Retail Sales meet forecasts, while jobless claims surprise lower.
  • Middle East attacks revive energy risks and Fed hike bets.
  • Mahmood appointment speculation eases UK fiscal discipline concerns.

The Pound Sterling trims some of its Wednesday gains versus the US Dollar, down by over 0.48% following solid US data. The sell-off comes amid risk aversion and augments the safe-haven appeal of the Greenback. At the time of writing, the GBP/USD trades at 1.3375, after peaking near 1.3545.

GBP/USD slips as strong claims data and geopolitics lift Dollar

US Retail Sales in June increased 0.2% MoM, as expected. Gasoline prices eased from $4.61 in May to $4.18 in the last month, leaving consumers with free money for discretionary spending. Excluding gasoline and autos, Retail Sales expanded 0.4% MoM, down from 0.5%

Other US data showed that jobless claims for the week ending July 11 fell from 216K to 208K, below estimates for a 217K increase. On Wednesday, the Federal Reserve’s (Fed) Beige Book noted that the “employment rose on balance,” in July, with some districts “showing modest, moderate or solid gains.”

The Greenback rises some 0.23% as the US Dollar Index (DXY), which tracks the buck’s value against a basket of six currencies, is at 100.72, bolstered by US data and the Middle East conflict.

Hostilities continued on Thursday with the US launching attacks on Qeshm Island and also hitting an Oil tanker. Iran retaliated, launching strikes on American bases in Kuwait and Jordan.

The potential disruption to energy supply has increased speculation that the Fed could raise rates this year. In July, the odds are very slim, with a 73% chance of holding rates unchanged, but for the October 28 meeting, the chances of a rate increase rose to nearly 57%, according to Prime Terminal data.

Source: Prime Terminal

In the UK, the economy grew modestly by 0.1% in May, up from a -0.1% contraction reported in April. The three-month rollover, which jumped 0.7% to May, exceeded estimates of a 0.5% increase and was unchanged from the previous print.

Aside from this, the incoming UK Prime Minister, Andy Burnham, is expected to appoint Shabana Mahmood as finance minister instead of Ed Miliband, easing concerns about fiscal discipline.

GBP/USD Price Forecast: Technical outlook

Chart Analysis GBP/USD
GBP/USD daily chart

In the daily chart, GBP/USD trades around 1.3484, maintaining a mildly bullish near-term bias as it holds above the Simple Moving Average (SMA) cluster near 1.3385. Price is pressing just under a descending resistance trendline at 1.3489, while the Relative Strength Index (RSI) at 60 leans to the positive side, suggesting buyers retain the upper hand as long as the pair stays supported above the moving average base.

On the topside, immediate resistance is seen at the downtrend line break level at 1.3489, followed by a secondary barrier at the upward trend-line break zone near 1.3495, where supply could initially cap advances. On the downside, the first important support emerges at the SMA region around 1.3385, and a sustained hold above this floor would keep the broader constructive tone intact despite nearby trendline congestion.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHF
USD0.16%0.41%0.13%-0.03%-0.05%0.04%0.30%
EUR-0.16%0.25%0.00%-0.19%-0.13%-0.10%0.14%
GBP-0.41%-0.25%-0.26%-0.42%-0.39%-0.35%-0.08%
JPY-0.13%0.00%0.26%-0.19%-0.12%-0.09%0.17%
CAD0.03%0.19%0.42%0.19%0.07%0.10%0.35%
AUD0.05%0.13%0.39%0.12%-0.07%0.05%0.29%
NZD-0.04%0.10%0.35%0.09%-0.10%-0.05%0.24%
CHF-0.30%-0.14%0.08%-0.17%-0.35%-0.29%-0.24%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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