UK retail sales decreased 1.2% month over month in July after increasing by 0.6% in June, which was much less than the 0.5% loss that was anticipated. In addition, the year-over-year numbers revealed a contraction of 3.2% as opposed to the prior -1.6% and missing the anticipated -2.1%.
The GBP/USD pair is under pressure to decline due to elevated risk aversion, strong US Treasury yields, and ongoing economic problems in China. These elements might strengthen the US dollar's position and possibly affect the direction of the Cable as a whole.
Following the publication of UK inflation data on Wednesday, GBP/USD traders may become more circumspect. The pair's upward momentum has been fueled by the statistics, which may have increased fears about the probability of interest rate increases by the Bank of England (BoE) at its meeting in September.
Gains made during the previous three trading sessions are being retraced by the US Dollar Index (DXY). The DXY, which gauges how the US dollar performs against the other six main currencies, is stagnant at around 103.40. Despite better US statistics, the US dollar (USD) continues to decline, which causes the market to be cautious as it looks for additional signs of an inflationary environment.
Initial Jobless Claims for the week ending on August 11 dropped from 250K to 239K, which was a little improvement over the anticipated estimate of 240K. In addition, the August Philadelphia Fed Manufacturing Survey showed improvement, rising to 12 from the prior -13.5 and above the predicted -10.
Investors will likely be paying close attention to the publication of US economic data next week, especially Home Sales and the August S&P Global PMI surveys' preliminary results. The GfK Consumer Confidence figures for August will be made public in the UK together with the results of the PMI survey. These data sets might offer perceptions into the economic health of both nations, assisting in the development of viable betting strategies for the GBP/USD pair.
Additionally, the upcoming week's annual Jackson Hole Symposium will be a prominent topic of attention. Central bankers, policy experts, and academics will gather for this event to thoroughly assess the outlook for the world economy, with a focus on tackling the current inflationary climate.