Good news from the UK: consumers were more active in June. Retail sales are up 0.6% and this comes on top of an upwards revision. Year over year, sales are up 3%. Core retail sales are up 0.9% m/m and 2.9% y/y also ahead of expectations. All figures are better than predicted.
GBP/USD recaptures 1.30 after the previous fall. Where will it go next?
Update: after the big jump, GBP/USD falls back down. The gains are unsustained and the move reflects weakness in cable. What cannot go up on good news, has a good potential to drop.
The UK was expected to report a rise of 0.4% in monthly retail sales in June after a big drop of 1.2% in May. Year over year, a rise of 2.5% was on the cards. Similar figures were predicted for core sales: 0.5% m/m and 2.5% y/y.
GBP/USD was tumbling down below 1.30 ahead of the publication. Contrary to normal activity ahead of the release of UK indicators, the move this time does not seem related to rumors. The US dollar is clawing back up across the board after the big sell-off early this week.
Earlier in the week, the pound was not able to take full advantage of the greenback’s slide due to a slowdown in inflation. At 2.6%, the pace of inflation outpaces wage growth, but the drop from 2.9% implies a lower chance of a rate hike this year.
More: Buy GBP/JPY – Citi trade of the week
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