Title: GBP/USD fades bounce off monthly low near 1.1900 on mixed UK Retail Sales
August 19, 2022 02:12 AM ET
The GBP/USD pair retreated towards 1.1900 after UK retail sales data failed to impress the bulls early Friday morning in Europe. The bearish bias is also inspired by the US dollar as a whole, amid a recession and hawkish bets from the Fed.
That said, U.K. retail sales for July fell to 3.4% y/y from an expected 3.3% and a downwardly revised 6.1%. However, the details look promising but failed to support the GBP/USD rebound.
Earlier, the GfK UK Consumer Sentiment Index hit a record low of -44 in August, up from -41 in July.
Reuters mentioned after the data was released that British households are feeling "a sense of exasperation" over the rising cost of living, which has pushed consumer sentiment to its lowest level since at least 1974, according to the country's oldest survey of household finances.
Meanwhile, the front-runner for the British prime minister's job, Liz Truss, also tried to impress voters by saying that her government's main mission would be to revive the economy, according to Reuters.
However, the current pessimism surrounding the U.K.'s economic crisis and Brexit-related issues is causing market participants to ignore Ms. Truss' optimism.
It is worth noting that the surge in the US Dollar Index (DXY) to the monthly high near 107.70 is putting downward pressure on GBP/USD prices. The greenback has gained on all fronts recently. The Sino-U.S. standoff, fears of an economic slowdown in China and Europe, and hawkish Fed rhetoric are among the main catalysts favoring the greenback.
Wall Street closed mixed, putting downward pressure on the S&P 500 Futures, which were down 0.17% intraday at the time of publication. In addition, 10-year U.S. Treasury yields reversed their previous day's decline from a monthly high to 2.891% at press time.