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GBP holds above 1.3300 as UK PMI and retail data surprise

UK retail sales rose 1.0% month on month in June, while the UK Composite PMI returned to expansion at 52.1 in July, helping support GBP/USD.

Reported · Written up by our desk · Major Pairs

TD Securities flagged a rebound in UK economic indicators as a key driver for sterling, noting the UK Composite PMI climbed back into expansion to 52.1 in July.

The bank attributed the improvement to manufacturing strength and a services PMI recovery to 51.8. It also pointed to easing input cost inflation and business confidence rising to its highest level since February.

Retail sales provided an additional upside surprise, rising 1.0% month on month in June versus market expectations for a decline, which helped GBP/USD defend the 1.3300 area after a sharp prior drop.

Despite the data support, the newsletter said gains appear capped as investors remained cautious amid further escalation of Middle East tensions, while attention stayed on inflation-related concerns.

Latest closeGBP/USD 1.331 ▼0.5%

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