The GBP\/USD has trimmed some of Wednesday\u2019s gains after treading above 1.2400, the US economic data bolstered the US dollar, a headwind for the Pound Sterling.
Retail Sales in the UK were disappointing while Brexit negotiations improved, according to McGrath, Irish PM. The GBP\/USD pair dropped as the release of US economic data bolstered the US dollar, which is staging a comeback after being battered throughout the week.
The retail sales data reported in the UK was another reason to dump the Sterling. At the time of writing, the GBP\/USD trades at 1.2380, down by 0.14%.
Growth is still the reason driving the financial markets. In the fourth quarter, the US economy grew by 2.9% QoQ, while Q3 printed a 3.2% jump, as the US Department of Commerce reported. For 2022, the economy expanded by 2.1%, lower than in 2021, 5.9% YoY.
US Durable Good Orders for December rose 5.6% MoM, recovering from November\u2019s -2.1% contraction. Elsewhere, US Department of Labor data showed the labor market resilience. Initial Jobless Claims for the week ending January 21 fell to 186K, below estimates of 205K.
Hence, the US Dollar Index (DXY), a gauge that tracks the buck\u2019s value against a basket of peers, is erasing Wednesday\u2019s losses and rising 0.44%, up at 102.097, a headwind for the GBP\/USD.
Earlier, UK retail sales reported by the Confederation of British Industry edge slumped over the last month at the fastest rate since April 2022, reaffirming the weak state of the UK economy.
Data showed sales plunging to -23 from 11in December\u2019s report. Retailers began the new year with a return to falling sales volumes, as the sector continues to face the twin headwinds of rising costs and squeezed household incomes.
Brexit news might positively impact the Pound Sterling. Irish Finance Minister Michael McGrath commented that Ireland and the UK have a shared determination to secure an agreement after meeting with Chancellor of the Exchequer Jeremy Hunt on Thursday.
McGrath added that negotiations around Northern Ireland reached a new level and that there\u2019s a good atmosphere, even though there are still some issues to be resolved.
On Friday, the US economic docket will witness PCE data, with the monthly reading estimated at 0.3%, while annually based is foreseen at 4.4%. Headline PCE data is expected at 0.1% Mom and 5.5% YoY.<\/p>\n","protected":false},"excerpt":{"rendered":"
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