fbpx

Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

GBP/USD rose to fresh session highs after strong CBI distributive trades

BritishPoundsThe sterling climbed to session highs against the US dollar on Wednesday, following a report to show that a gauge of British retail sales increased unexpectedly in September.

GBP/USD reached a session high at 1.6056 at 11:12 GMT. Support was likely to be received at September 18th low, 1.5891, while resistance was to be met at September 20th high, 1.6065.

Today the Confederation of British Industry (CBI) reported that the gauge of annual retail sales growth in the UK advanced to a reading of 34 in September, the highest level since June 2012, after a value of 27 in August. Experts had anticipated that the gauge will decrease to 24.

“Retail sales are a massive part of the recovery so the number was in focus,” said Eimear Daly, a currency-market analyst at Monex Europe Ltd. in London, cited by Bloomberg. “We’re around that $1.60 level so people are watching the pound closely. In the short term, it looks like there is more momentum behind sterling-dollar, however I would be cautious holding the pound as we head into the fourth quarter.”

In addition, the benchmark 10-year gilt yield reached 2.79% after dropping to 2.76%, or the lowest level since August 30th. The price of the 2.25% bond due in September 2023 was 95.34, according to Bloomberg.

In the mean time, market participants remained cautious, after New York Federal Reserve President William Dudley expressed his approval of the central bank’s decision to leave its stimulus program without change last week. He said that US economy “still needs the support of a very accommodative monetary policy.”

The data points out of the United States yesterday raised concerns over economic recovery outlook. House prices continued to rise in July, as S&P and Case-Shiller said that their index of house prices in 20 large US cities climbed 12.39% on annual basis, almost in line with expectations. On the other hand, US consumer confidence decreased at a faster pace than projected in September. Its corresponding index slowed down to 79.7 in September from the revised up reading of 81.8 in August.

Elsewhere, the sterling was almost unchanged against the euro, as EUR/GBP cross dipped a mere 0.01% to trade at 0.8420 at 12:06 GMT. The pound has appreciated 6.1% during the past six months, or the best performing currency among the 10 developed-nation currencies, tracked by Bloomberg Correlation-Weighted Indexes. The US dollar has lost 0.2% of its value, while the euro has gained 5.5%.

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News