Pound Sterling moves little following UK Retail Sales data

GBP/USD steadies following the release of better-than-expected UK Retail Sales data
UK Retail Sales fell 0.4% MoM in February, better than the -0.8% forecast, while YoY growth rose to 2.5%.
The US Dollar weakens as easing risk aversion follows Trump’s pause on attacks on Iran’s energy sector.

Akhtar Faruqui FXStreet

GBP/USD halts its three-day losing streak, trading around 1.3330 during the early European hours on Friday. The pair holds ground following the release of the United Kingdom’s (UK) Retail Sales figures.

The UK Retail Sales declined by 0.4% month-over-month (MoM) in February, against the expected -0.8% reading. The annual retail sales increased by 2.5%, against the expected 2.1%.

The UK GfK Consumer Confidence Index dropped to -21 in March from -19 in February, hitting a near one-year low as Middle East conflict concerns over inflation and growth weighed on sentiment.

The GBP/USD pair remains stronger as the US Dollar (USD) weakens on easing risk aversion after US President Donald Trump said Washington would pause attacks on Iran’s energy sector for 10 days at Tehran’s request. However, Iran denied making such a request, underscoring fragile diplomacy and low odds of a near-term ceasefire.

However, the GBP/USD pair may lose ground as the US Dollar may regain its ground amid rising inflation concerns on the fading likelihood of further Federal Reserve (Fed) rate cuts and increased bets on a potential hike by year-end.

Federal Reserve (Fed) Vice Chair of Supervision Philip Jefferson said higher energy prices should have a modest impact on inflation, though a sustained shock could be more significant. Meanwhile, Fed Governor Michael Barr warned that another price shock could lift inflation expectations, reinforcing the case for the Fed to assess economic conditions before adjusting policy.

Economic Indicator

Retail Price Index (MoM)

Retail Price Index released by the National Statistics is a statistical measure of a weighted average of prices of a specified set of goods and services purchased by consumers. It is widely considered as a key measure of inflation that indicates an accurate reflection of the cost of living. Normally, a high reading is seen as positive (or bullish) for the GBP, whereas a low reading is seen as negative (or bearish).

GBP/USD surrenders some gains, back to 1.3420

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EUR/USD turns positive, targets 1.1450

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Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.