British Pound Hits 10-Month Lows on Disappointing UK Retail Sales

The British pound today dropped to new 10-month lows following the release of disappointing UK retail sales data for June. The GBP/USD currency pair extended its losing streak for the third consecutive day even as investors ditched the pound on Brexit jitters amid recent weak economic releases.

The GBP/USD currency pair today dropped from an initial high of 1.3082 to a low of 1.2974 and was on a downtrend at the time of writing.

The UK retail sales data released today by the Office for National Statistics accelerated the pair’s decline, which had begun in the mid-Asian session. The headline UK retail sales contracted by 0.5% in June as compared to the consensus estimate of a 0.2% expansion. The core retail sales figures also fell by 0.6% in June, which was a major disappointment for investors who were expecting 0.2% growth. A senior statistician at the ONS Rhian Murphy stated that:

Retail sales grew strongly across the three months to June 2018 as the warm weather encouraged shoppers to buy food and drink for their BBQs.

However, he attributed the June slump to shoppers staying home due to the heatwave while watching the FIFA World Cup. The US dollar continued to gain against the pound even as the US and China exchanged harsh words due to unsuccessful negotiations.

The currency pair’s short-term performance is likely to be affected by Brexit headlines, the release of US initial jobless claims data, and the Philadelphia Fed business outlook survey.

The GBP/USD currency pair was trading at 1.2991 as at 11:40 GMT having dropped from an initial high of 1.3082. The GBP/JPY currency pair was trading at 146.80 having declined from a high of 147.55.

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