Sterling stamina was spectacular – until it evaporated instantly. The pound had been showing its power, resisting dollar strength, shrugging off worrying Brexit rhetoric and ignoring weak wages. Nevertheless – and on a day in which UK data beat expectations – it succumbed to pressure and fell sharply, Yohay Elam from FXStreet reports.
“Cable has been edging higher after Retail Sales beat expectations with 0.9% in January. However, the limited nature of this advance seems to confirm sterling’s new bias – a bearish one.”
“After Britain’s Consumer Price Index beat expectations with 1.8%, GBP/USD advanced only to begin a long descent.”.
“The risk that the UK exits the transition period on World Trade Organization terms is weighing on the pound.”
“The US dollar has been extending its gains across the board. (…) Wednesday’s bulk of economic indicators – Housing Starts, Building Permits, Producer Prices – all beat estimates.”
“The Federal Reserve’s meeting minutes from its January decision also contributed to the greenback’s strength. The world’s most powerful central bank seems united on its policy of keeping rates unchanged.”