GBP/USD slid in expectation of US retail sales

dolar_euro_pound_yenOn Monday the sterling came off session highs against the US dollar, as market participants remained wary ahead of the US retail sales report, scheduled for release on Tuesday amid the continuing lack of clarity over the future of Federal Reserve Bank’s stimulus.

GBP/USD fell from its highest point at 1.5520, registered in early Asian trade, to reach a session low at 1.5461 at 8:07 GMT, the lowest since August 7th. Consolidation followed at 1.5470. The pair was likely to receive support at the psychological 1.5400 level, while resistance was to be met at August 9th high, 1.5557.

In the United Kingdom, the benchmark 10-year yield rose three basis points or 0.03%, to 2.49% today, after the increase to 2.56% registered on August 7th, the highest point since June 25th.

Last week the British currency remained supported after the Bank of Englands less dovish than projected tone, when giving forward guidance on interest rates.

In the mean time, the US dollar firmed its positions ahead of the retail sales report out of the United States on Tuesday, after having fallen to seven-week lows against the pound last week, following the disappointing non-farm payrolls report on August 2nd, which stated US economy added fewer than anticipated job positions during July. This made market players reassess their expectations, regarding the timing of Fed’s bond purchase pare back.

Elsewhere, the pound was trading slightly higher against the euro, as EUR/GBP cross dipped 0.10% to 0.8597 at 8:24 GMT. British currency was gaining against the Japanese yen as well, with GBP/JPY pair advancing 0.34% to 149.72 at 8:25 GMT. Sterling has advanced 1.2% over the past three months, according to Bloomberg Correlation-Weighted Indexes, tracking 10 developed-nation currencies. The euro has increased 3.1%, while the US dollar added 0.4%.

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