GBP/USD reaches a weekly low beneath 1.3750 on disappointing UK Retail Sales
- GBP/USD prints a new weekly low at 1.3745.
- Awful UK’s Retail Sales report fails to boost the British pound.
- The greenback strengthened despite a fall in Consumer Sentiment.
GBP/USD is sliding in the American session to new weekly lows, trading at 1.3754, down 0.26% at the time of writing. As we approach the London Fix and head into the weekend, we could expect some downward pressure on the back of the dampened market sentiment.
The market sentiment is downbeat. US stocks are losing ground, following the European trend, and bond yields rise as investors turn cautious on the global economic recovery amid worries about the Delta strain and risks from China.
UK Retail Sales disappoint the market
During the European session, the Office for National Statistics reported that Retail Sales shrank 0.9% in August, worse than the 2.5% gain (YoY) foreseen by economists. This negative data adds to concerns about economic recovery, albeit sales volumes remain above pre-pandemic levels.
Across the pond, the University of Michigan Consumer Sentiment rose to 71 in September, a tick lower than the 72.2 expected by analysts. Digging a little deeper on the report, buying conditions for homes, household durables, and vehicles fell. The report said that the declines were attributable to high prices. Consumers expect inflation to rise 4.7% in 2022.
Commenting on the data, Richard Curtin, Surveys of Consumers chief economist noted, "the steep August falloff in consumer sentiment ended in early September, but the small gain still meant that consumers expected the least favorable economic prospects in more than a decade."
Heading into the next week, the Federal Open Market Committee will meet to discuss monetary policy on September 21-22, followed by the Bank of England on September 23.
Technical levels to watch