- After the UK’s ONS reports bright retail sales data for March, sterling in the pound will rebound against its key peers.
- Traders are confident in BOE’s interest rate cut of 25 bps in May.
- The escalation in the US-China trade war supports the US dollar.
Pound Sterling (GBP) is striving to acquire ground near a low of 1.3280 against the US dollar (USD) for several European trading hours, following the release of bright UK (UK) retail sales data in March. The GBP/USD pair is still down nearly 0.3% as the US dollar (USD) excels in the hopes of de-escalation in the US-China trade war.
The US Dollar Index (DXY), which tracks the value of greenbacks against six major currencies, will rebound to near 99.70 after a sudden revision on Thursday. After the White House showed that it could make a deal and that both countries could reduce tariffs before they came to the table, the fear of a spiral trade war between the two biggest powers of the world began to diminish.
US Treasury Secretary Scott Bescent said Wednesday that both countries will reduce additional tariffs recently imposed. “Neither side believes these are at a sustainable level,” Bescent said. Hopes for de-escalation in the tariff war are further boosted by indicating that Beijing is considering exemptions from tariffs on some US goods. China is considering suspending 125% import duties on US medical devices and some industrial chemicals, according to a Bloomberg report.
Economically, US durable goods order data stronger than expected in March shows that tariff policies by the US president have begun to be fed into business activities. The cost of durable goods orders received by employers rose at a robust pace of 9.2%, with estimates of 2% and pre-releases of 0.9%. The multifold increase in economic data is evidence of Federal Reserve officials’ attitude to avoid monetary policy adjustments before making more clear about how new economic policies shape economic outlook.
Daily Digest Market Movers: Pound Sterling Rebound with Amazingly Positive UK Retail Sales Data
- Sterling of the pound will bounce back against key peers on Friday after the release of surprising positive UK retail sales data in March. The National Bureau of Statistics (ONS) reports that retail sales, an important measure of consumer spending, rose 0.4% per month, while economists expect a 0.4% decline. In February, the Consumer Expense Scale rose 0.7%, revised from 1%.
- Year-over-year retail sales grew surprisingly at a faster pace of 2.6% and at a moderate pace of 1.8% compared to a 2.2% pre-release.
- In theory, UK retail sales data forces them to soften the bets in favor of the Bank of England (BOE)’s expansionary monetary policy stance. However, traders are confident that BOE will reduce interest Fee At the policy meeting in May, it was 4.25% from 25 basis points (BPS).
- Serious uncertainty about the global economy Outlook Facing tariffs announced earlier this month by US President Donald Trump, slower than expected Consumer Price Index (CPI) March data is the main catalyst behind the solid Boe Dovish bet.
- BoE Governor Andrew Bailey is expected to speak to CNBC TV on the sidelines of the International Monetary Fund’s spring meeting in Washington, with the US-announced “tariffs” and “measures” expected to bring a “shockwave” to UK economic growth. But Bailey ruled out the possibility of a recession. “At this point, I don’t think the UK economy is near a recession,” Bailey said. On Wednesday, he stressed the need to consider trade war risks. “We must take the risks of growth very seriously,” Bailey said.
- Meanwhile, investors are calling for trade negotiations between UK Rachel Reeves and Washington’s British Prime Minister on Friday. Prior to negotiations, Reeves said on Thursday’s US TV outlet News Max he is confident that he can “take a deal.”
Technical Analysis: Pound Sterling aims to be at the foot of approximately 1.3300 companies
lb Sterling Wednesday’s European session will trade to nearly 1.3300 against the US dollar. The outlook for the pair is solid as everything is short and the short moving average (EMA) is sloped higher.
The 14-day relative strength index (RSI) cools to nearly 63.00 after excessive purchase. This shows a mild fix for the pair after a strong gathering, but does not negate the upward trend.
The advantage is that a psychological level of 1.3500 is an important hurdle for the pair. Looking down, the height on April 3rd was around 1.3200 and will serve as a major support area.
Brand content
Finding the right broker for your trading strategy is essential, especially when certain features make all the difference. Find out how to choose a top broker that offers unique benefits to your needs.
