GBP/USD struggles at 1.2400 and stumbles towards 1.2360 on US data, dismal UK retail sales – Crypto News – Crypto News
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GBP/USD faces barricades around 1.1250 as hawkish Fed bets soar GBP/USD faces barricades around 1.1250 as hawkish Fed bets soar

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GBP/USD struggles at 1.2400 and stumbles towards 1.2360 on US data, dismal UK retail sales – Crypto News

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2 years ago

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  • GBP/USD trims some of Wednesday’s gains after trading above 1.2400,
  • United States economic data bolstered the US Dollar, a headwind for the Pound Sterling.
  • Retail sales in the UK were dismal while Brexit negotiations improved, according to McGrath, Irish PM.

GBP/USD dipped as the release of US economic data bolstered the US Dollar (USD), which is staging a comeback after being battered throughout the week. Furthermore, dismal retail sales reported in the United Kingdom (UK) were another reason to dump the Pound Sterling (GBP). At the time of writing, the GBP/USD exchange hands at 1.2362, down by 0.25%.

US data boosted the US Dollar

Growth remains the reason driving the financial markets. In the fourth quarter, the United States The (US) economy grew by 2.9% QoQ, while Q3 printed a 3.2% jump, as the US Department of Commerce reported. For 2022, the economy expanded by 2.1%, lower than in 2021, 5.9% YoY.

At the same time, Durable Good Orders for December rose 5.6% MoM, recovering from November’s -2.1% contraction. Elsewhere, US Department of Labor data showed the labor market resilience. Initial jobless claims for the week ending January 21 fell to 186K, below estimates of 205K.

Hence, the US Dollar Index (DXY), a gauge that tracks the buck’s value against a basket of peers, is erasing Wednesday’s losses and rising 0.44%, up at 102.097, a headwind for the GBP/USD.

Earlier, UK retail sales reported by the Confederation of British Industry (CBI) edge slumped over the last month at the fastest rate since April 2022, reaffirming the weak state of the UK economy. Data showed sales plunging to -23 from 11 in December’s report. “Retailers began the new year with a return to falling sales volumes, as the sector continues to face the twin headwinds of rising costs and squeezed household incomes,” CBI Martin Sartorius said.

Aside from this, Brexit news crossed wires and might positively impact the Pound Sterling. Irish Finance Minister Michael McGrath commented that Ireland and the UK have a shared determination to secure an agreement after meeting with Chancellor of the Exchequer Jeremy Hunt on Thursday. McGrath added that negotiations around Northern Ireland have reached a new level and that there’s a good atmosphere, even though there are still some issues to be resolved.

What to watch?

On Friday, the US economic docket will feature the US Federal Reserve’s preferred gauge for inflation, the Core Personal Consumption Expenditures (PCE), with the monthly reading estimated at 0.3%, while annually based is forecast at 4.4%. Headline PCE data is expected at 0.1% Mom and 5.5% YoY.

GBP/USD Key Technical Levels

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