The British pound is in negative territory today and has fallen below the 1.15 line. In the North American session, is trading at 1.1497, down 0.38%.
US Retail Sales, Jobless Claims Beat Forecast
US rose 0.3% MoM in August, rebounding from -0.4% in July. Excluding gasoline, retail sales were up 0.8%, as consumers responded to lower gas prices by increasing spending on other items. The data indicates that consumer spending is holding up, despite an inflation rate of 8.3%. There was more positive news as US initial job claims fell for a fifth consecutive week, falling to 213 thousand. This follows the previous release of 218 thousand and beat the consensus of 226 thousand.
These releases are especially significant, as the Federal Reserve relies on a strong labour market and solid consumer spending in order to remain aggressive with its hawkish policy as its grapples with high inflation. The Fed is expected increase rates by 75 basis points next week, with an outside chance of a massive 100bp hike. has proved to be more resilient than expected, and with the Fed continuing its steep rate-hike cycle, we may see more demand destruction which raises the likelihood of a recession.
The UK wraps up a busy week with on Friday. Consumers have been hammered by the cost-of-living crisis and predictably are cutting back on spending, which will only exacerbate the grim economic landscape. Retail sales fell by 3.0% YoY in July, and the markets are bracing for an even worse month of August, with an estimate of -3.4%. A release of -3.0% or worse could extend the British pound’s losses.
GBP/USD is testing resistance at 1.1548. Next, there is resistance at 1.1689
There is support at 1.1417 and 1.1306
Originally Published Here -Source link