The Pound Sterling (GBP) weakens against a majority of its peers, except Asia-Pacific currencies, as the United Kingdom (UK) data for October contracted at a faster-than-expected pace. The British currency trades near 1.2550 against the (USD) in Friday’s London session, a six-month low.Retail Sales, a key measure of consumer spending, declined by 0.7% compared with the previous month. In September, sales increased by a marginal 0.1%, downwardly revised from the 0.3% previously reported. Year-on-year, Retail Sales grew by 2.4%, less than the estimates of 3.4% and the former release of 3.2% (downwardly revised from 3.9%).Weak Retail Sales data is expected to boost expectations of interest-rate cuts by the (BoE) in the December meeting as they highlight weakness in consumer spending, a key growth factor for the UK economy.Still, for now, traders expect the BoE to leave interest rates unchanged at 4.75% not only in the December meeting but also in the one to be held in February. This is because UK inflation data came in hotter than expected in October, with services inflation – a closely watched inflation indicator by BoE officials for decision-making on interest – rising to 5%. Investors should brace for more volatility in the British currency as the flash S&P Global/CIPS Purchasing Managers’ Index (PMI) data is scheduled to be published at 09:30 GMT. The Composite PMI is expected to come in at 51.8, unchanged from the previous month, suggesting that the country’s private-sector activity continued to expand. Investors will also focus on the impact of the Labour Party’s first budget on business sentiment.
Daily digest market movers: Pound Sterling refreshes six-month low against US Dollar
Technical Analysis: Pound Sterling sees more downside near 1.2550(Click on image to enlarge) Sterling slides to near 1.2550 against the US Dollar on Friday, extending losses for a third consecutive trading day. The GBP/USD pair’s outlook has turned bearish given that all short-to-long term Exponential Moving Averages (EMA) are sloping down.The 14-day Relative Strength Index (RSI) remains in the 20.00-40.00 range, suggesting that a strong bearish momentum is intact.Looking down, the pair is expected to find a cushion near May’s low of 1.2446. On the upside, the November 20 high around 1.2720 will act as key resistance.More By This Author:
