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Pound rises as weak US retail sales deepen USD slide

GBP/USD was around 1.3545 after US July retail sales fell 0.6% and Fed rate hike odds eased, with the dollar index down 0.4% to 99.54.

Reported · Written up by our desk · Major Pairs

The British pound strengthened on Friday as weaker US economic data fueled expectations that the Federal Reserve will stay more dovish. FXStreet reports GBP/USD rose about 0.40%, trading near 1.3545 after bouncing off daily lows around 1.3482.

US July retail sales dropped 0.6% after nine straight months of gains, missing forecasts for a 0.1% increase, according to the US Commerce Department. The “control group” used for GDP calculation also fell, down 0.4%, after June growth of 0.4%.

Consumer sentiment added to the setback, with the University of Michigan’s preliminary August reading falling from 55.2 in July to 51.0. Inflation expectations for the next 12 months edged up from 4.2% to 4.3%, while the 5-year outlook stayed at 3.3%, per the article.

FXStreet said money markets expect the Fed to hold rates unchanged, with odds at 70% and the chance of a rate hike at 30% as traders scaled back hike pricing. It also noted the US Dollar Index, which tracks the greenback versus six currencies, was down 0.40% to 99.54, set to finish the week near its lows.

Latest closeGBP/USD 1.354 ▲0.3%|Dollar index 99.64 ▼0.3%

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