GBP/USD Little Changed After U.K. Data Miss

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by: Investing.com

The pound was little changed against the U.S. dollar on Friday, after the release of downbeat U.K. retail sales data, as news this week of a snap election in June continued to support demand for the sterling and as sentiment on the greenback remained vulnerable.

GBP/USD hit 1.2773 during European morning trade, the session low; the pair subsequently consolidated at 1.2806.

Cable was likely to find support at 1.2766, the low of April 19 and resistance at 1.2909, the high of April 18 and a six-month peak.

The U.K. Office for National Statistics said retail sales slumped 1.8% in March after an increase of 1.7% in April, whose figure was revised from a previously estimated gain of 1.4%. Analysts had expected retail sales to drop by only 0.2% last month.

Year on year, retail sales increased 1.7% last month, compared to forecasts for growth of 3.4%.

Core retail sales, which exclude automobile sales and fuel, decreased by 1.5% in March, confounding expectations for a 0.4% fall.

But the pound remained broadly supported after U.K. Prime minister Theresa May on Tuesday called a snap election for June 8.

The next day, the British Parliament approved by an overwhelming 522 votes against 13 May's call for an early election, setting the stage for what will define the terms of the U.K.'s withdrawal from the European Union.

Meanwhile, the greenback regained some footing after U.S. Treasury Secretary Steven Mnuchin said on Thursday that the administration will unveil a tax reform plan very soon, easing doubts over whether President Donald Trump will be able to pass tax reforms in the near term.

But sentiment on the dollar remained vulnerable amid mounting tensions with North Korea, whose state media warned the U.S. earlier in the week of a "super-mighty preemptive strike" and said don't "mess with us."

Thursday's disappointing data on U.S. initial jobless claims and manufacturing activity in the Philadelphia area also weighed.

The sterling was also moderately lower against the euro, with EUR/GBP adding 0.10% to 0.8375.

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