Pound Sterling Price News and Forecast: GBP/USD struggles as UK retail sales drop sharply

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GBP/USD struggles as UK Retail Sales drop sharply – BBH

GBP/USD is trading heavy above key support at 1.3000. Disappointing UK economic activity and the expected fiscal drag from the upcoming UK budget leave room for the BOE to deliver more easing than is currently priced-in (63bps in the next 12 months). As such, we expect GBP to keep underperforming on the crosses, BBH FX analysts report.

"UK retail sales growth falls more than expected in October with retailers reporting that consumers held back in preparation for Black Friday discounts. Total retail sales volumes dropped -1.1% m/m (consensus: -0.2%) vs. 0.7% in September (revised up from 0.5%). Excluding auto fuel, retail sales volumes declined -1.0% m/m (consensus: -0.5%) vs. 0.7% in September (revised up from 0.6%)." Read more...

GBP/USD Forecast: Seems vulnerable amid BoE rate cut bets, ahead of UK budget next week

The GBP/USD pair trades with a positive bias for the second straight day on Friday, though it remains confined in the previous day's broader trading range, around the 1.3100 round figure during the early European session. The US Dollar (USD) moves away from its highest level since late May, touched in the aftermath of mostly upbeat US employment details on Thursday, and offers support to spot prices. However, the dismal UK macro data caps the British Pound (GBP) ahead of the UK budget announcement next week and acts as a headwind for the pair.

The US Bureau of Labor Statistics published the closely-watched Nonfarm Payrolls report on Thursday, which showed that the economy added 119K new jobs in September. The reading followed the 4K decrease (revised from +22K) recorded in August and surpassed the market expectation of 50K. Additional details revealed that Average Hourly Earnings held steady at 3.8% YoY, compared to the estimates of 3.7%, overshadowing an uptick in the Unemployment Rate from 4.3% to 4.4% and validating less dovish Federal Reserve (Fed) expectations. Read more...

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