British Pound eases as UK sales drop, US services beat
The Pound Sterling loses some ground against the US Dollar, though it remains poised to end the week with gains of over 0.60%, even as UK Retail Sales disappointed investors and US business activity improved in August. The GBP/USD trades at 1.3626, down some 0.02%.
The British Pound (GBP) experienced a slight decline against the US Dollar (USD) as UK retail sales fell short of expectations, while US business activity showed improvement in August. The GBP/USD currency pair traded at 1.3626, down 0.02% from the previous close. US services sector performance improved, with the Services PMI rising from 54.6 to 56.8, exceeding expectations.
However, the Manufacturing PMI remained below expectations at 53.2. The US Dollar Index (DXY) remained flat at 98.88, supported by a rise in US yields. The 10-year US Treasury note yield increased to 4.736%, nearing weekly highs. Despite initial pricing in the US Treasury bond buyback, the market has since moved on. Fed Chair Kevin Warsh's speech at the Jackson Hole economic symposium is expected to provide insights into future interest rate actions.
In the UK, retail sales disappointed investors, contracting 0.9% month-over-month. The Bank of England may still need to raise interest rates further, given the recent inflation and GDP data suggesting a need for more rate hikes. Technical analysis shows the GBP/USD pair trading at 1.3638, supported by key structural levels and a bullish near-term bias, but momentum is stretched with the Relative Strength Index near overbought conditions.
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