GBP/USD declines towards 1.1400 on lower consensus for UK Retail Sales
- GBP/USD is expected to scale down further towards 1.1400 ahead of UK Retail Sales data.
- As per the estimates, UK Retail Sales will drop by 4.2% on an annual basis.
- The DXY is maintaining itself at elevated levels on higher-than-expected US Retail Sales data.
The GBP/USD pair has surrendered the psychological support of 1.1500 and is declining towards a multi-decade low at 1.1400. The asset has extended its losses after dropping below Wednesday’s low at 1.1480 and more downside looks certain amid downbeat consensus for the UK Retail Sales data. An upbeat US Retail Sales data released on Thursday is responsible for the establishment of the cable below the psychological support of 1.1500.
On Thursday, the US Retail Sales landed at 0.3%, higher than the expectations of 0% and the prior release of -0.4%. As the retail demand has expanded by 0.3%, investors keep the US dollar index (DXY) at elevated levels.
The investing community is aware of the fact that the inflationary pressures have yet not responded well to the soaring interest rates by the Federal Reserve (Fed). And, higher interest rates always decline the value of paychecks received by the households. But growth prospects, retail demand, and labor market are extremely robust in the US economy, which is shielding the economy against the consequences of red-hot inflation.
On the pound front, investors are dumping sterling ahead of the UK Retail Sales data. The economic data is expected to decline by 4.2% against a decline of 3.4% reported earlier on an annual basis. Also, the monthly figure will display a decline of 0.5% against a rise of 0.3% reported earlier. The overall demand in the UK economy is getting poor led by higher energy bills and a worsening labor market. This indicates a significant decline in the confidence of consumers in the economy.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
