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Home » Forex Technical Analysis » GBP Lower After Strong Retail Sales In US

GBP Lower After Strong Retail Sales In US

  • August 15, 2024
  • 235

On Thursday, the British pound posted declines but has managed to claw them back and was later in positive territory. GBP/USD traded at about 1.2846, up 0.20% for the day in the North American session.

After falling into a technical session in the second half of last year, the UK economy is rebounding. GDP rose 0.6% in Q2, as per expectations, and slightly lower than the first quarter gain of 0.7%.

GDP rose 0.9% on an annualized basis, up from 0.3% and as per the market estimate. The annualized gain was the strongest growth rate since the third quarter of 2022.

The strong GDP data came after yesterday’s inflation release. July CPI rose to 2.2%, higher than the gain of 2% in June but lower than the 2.3% market estimate.

The strong GDP may lead to a pause at the rate meeting in September. The markets expect the next rate cut in Nov. after the Bank of England implemented the first cut earlier in the month.

Although the US economy may have slowed, don’t count the US consumer out. In July, retail sales jumped 1% m/m, sharply higher than a revised -0.2% and also much higher than the 0.3% market estimate. The strong data supports a rate cut of 0.25%.

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