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Pound US Dollar (GBP/USD) Exchange Rate Falls despite Worst US Retail Sales in Almost a Decade

February 14, 2019 - Written by John Cameron

GBP/USD Exchange Rate Falls as US Retail Sales Plummet


The Pound US Dollar (GBP/USD) exchange rate is down today and is currently trading around $1.2817 on the inter-bank market.

The US Dollar (USD) gained against the Pound (GBP) today despite US retail sales figures for December falling considerably below expectation by -1.2%.

The monthly US retail sales excluding autos figure for December also fell unexpectedly by -1.8%, its worst fall in nine years.

These were also followed by disappointing US continuing jobless claims figures for February, which increased above expectation to 1.773 million.

Meanwhile, many US Dollar investors are awaiting President Donald Trump, who promised to sign a compromise bill to avoid another US government shut down.

Trump said yesterday:

‘I don’t want to see a shutdown… A shutdown would be a terrible thing.’

Some ‘Greenback’ traders are remaining optimistic that a compromise looks increasingly likely between the White House and Congress, which will prevent the US government facing another shutdown on Friday.

GBP/USD Exchange Rate Drops as Theresa May Risks Defeat in Commons


Brexit is also in the spotlight today, with Prime Minister Theresa May in the House of Commons facing heated discussions as MPs prepare to vote on various amendments to her withdrawal deal.

Many GBP traders are feeling jittery today, with signs that the Conservative Party faces a revolt as members of the European Research Group have stated their opposition to the new government motion, which effectively removes no-deal off the table.

Liam Fox, the International Trade Secretary, warned Conservative MPs against sending the ‘wrong signal’ to Brussels, commenting:

‘This is not an academic debate. It's listened to quite seriously by those who will be negotiating with the UK.’

Pound investors are remaining generally cautious, however, as inter-party disputes increase the Brexit deadlock and raise the likelihood of no-deal.

Stephen Barclay, the Brexit Secretary, also warned:

‘We should not give [the EU] that excuse not to engage.’

The Pound, meanwhile, was further weakened following the printing of the UK RICS housing price balance figures for January, which fell below expectation to -22% – their worst in 10 years.

Mark Zorab, a director at Elstons estate agents, commented:

‘Fifty per cent of [the] general public [is] waiting to see what the Brexit outcome is. The other 50% is keen to buy but only at the right price.’

GBP/USD Forecast: Pound Could Rise on Positive Retail Sales Figures


Pound traders will be looking ahead to the publication of the UK retail sales figures tomorrow.

Any increase could see Sterling rise against the US Dollar.

‘Greenback’ investors, meanwhile, will be looking ahead to the release of the US Michigan Consumer Sentiment Index figures for February, which are expected to increase.

Tomorrow will also see the publication of the US industrial production figures for January.

The GBP/USD exchange rate will remain sensitive to Brexit developments this week, and any signs that a Brexit no-deal is removed from the table could see Sterling rise.

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