British Pound steadies against Japanese Yen following outperformance in UK Retail Sales

UK Retail Sales surged 1.0% in June, easily beating forecasts of a 0.3% decline.
Core Retail Sales jumped 5.4% year-over-year, demonstrating resilient consumer spending despite economic pressure.
Broader Sterling strength helped the GBP/JPY cross hold ground amid ongoing Japanese Yen weakness.

Akhtar Faruqui FXStreet

GBP/JPY remains calm after six days of losses, trading around 218.20 during the early European hours on Friday. The currency cross holds its ground as the British Pound (GBP) receives support from the release of stronger-than-expected UK Retail Sales data.

According to the UK Office for National Statistics (ONS), Retail Sales climbed 1.0% month-over-month in June following a 1.2% rise in May, handily beating market forecasts of a 0.3% decline. On an annual basis, June Retail Sales grew by 4.2%, outperforming both May's revised 3.5% increase and the expected 2.3%. Core Retail Sales—which exclude volatile auto and motor fuel—also showed robust growth, rising 1.1% MoM against an anticipated 0.4% contraction, while annual core sales surged 5.4% versus the 3.2% consensus estimate.

Meanwhile, the Japanese Yen (JPY) continues to struggle, giving the GBP/JPY cross further room to stabilize. Verbal warnings of potential government intervention have failed to stem the Yen's decline, as traders largely brushed off remarks from Japan’s Finance Minister regarding decisive action in the forex market.

Even with Bank of Japan officials remaining open to faster rate hikes than currently priced in, domestic fiscal concerns surrounding Prime Minister Sanae Takaichi's policies continue to weigh on the Japanese Yen. Furthermore, escalating US-Iran tensions have raised fears for Japan's energy-dependent economy, leaving the Yen increasingly vulnerable to rising fuel costs.

Economic Indicator

Retail Sales (YoY)

The Retail Sales data, released by the Office for National Statistics on a monthly basis, measures the volume of sales of goods by retailers in Great Britain directly to end customers. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the YoY reading comparing sales volumes in the reference month with the same month a year earlier. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

Weekly focus – The hawks set the tone

Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.