GBPUSD remained on the defensive at 1.2590.
During Friday’s early European session, the GBPUSD pair remained stuck below the psychological threshold of 1.2500.
The UK Retail Sales came in stronger than predicted, climbing 3.4% MoM in January after falling 3.3% in December.
The positive UK Retail Sales report did not help the Pound Sterling (GBP). Since investors are still concerned about the UK GDP numbers for Q4. Which suggested that the UK economy entered a technological recession. GBPUSD is presently trading in 1.2590, down 0.04% on the day.
According to the most recent data from the UK National Statistics. The country’s retail sales increased 3.4% MoM in January, up from a 3.3% decrease the previous month. Exceeding the 1.5% estimate. Retail Sales climbed by 0.7% year on year in January. Following a 2.4% decline in the prior reading.
The poor US retail sales in January raised the chance that the Fed may drop interest rates sooner.
The UK Gross Domestic Product (GDP) data for the fourth quarter, which are anticipated on Thursday, showed that the UK economy fell into a technical recession in the second half of 2023, ahead of a general election scheduled this year. The GDP growth report might put pressure on the BoE to lower interest rates as early as May. Nevertheless, the Before they can decrease interest rates, UK central bank policymakers want more proof that inflation will return to the target rather than continue to rise.
Across the water, softer US January Retail Sales fueled speculation that the Federal Reserve (Fed) could cut interest rates sooner, dragging the Greenback down in the previous session. US retail sales decreased 0.8% MoM in January, following a 0.4% increase in December, which was worse than the expected 0.1% decline. According to the US Census Bureau, Retail Sales Control Group down 0.4% MoM compared to 0.6% the previous month.
Traders will keep an eye on the US January Producer Price Index (PPI),
Investors will be watching the US Producer Price Index (PPI) for January, which is due on Friday. If the report indicates a weaker-than-expected outcome, this could exert some selling pressure on the US dollar.
Later in the day, the US Housing Starts, Building Permits, and University of Michigan Consumer Inflation Expectations will also be announced. These events could provide obvious direction for the GBPUSD pair.
