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Forex - GBP/USD drops on downbeat U.K. retail sales

Investing.com -

Investing.com - The pound dropped against the U.S. dollar on Friday, as the release of downbeat U.K. retail sales data added to concerns over the strength of the economy, while hopes for a near-term U.S. rate hike continued to support demand for the greenback.

GBP/USD hit 1.2403 during European morning trade, the lowest since Wednesday; the pair subsequently consolidated at 1.2421, declining 0.54%.

Cable was likely to find support at 1.2379, Wednesday's low and resistance at 1.2550, the high of February 14.

The U.K. Office for National Statistics said retail sales decreased 0.3% in January, compared to expectations for a 0.9% rise.

Year-on-year, retail sales increased by 1.5% last month, compared to forecasts for a 3.4% gain.

Core retail sales, which exclude automobile sales and fuel, fell 0.2% in January, confounding expectations for an increase of 0.7%.

Meanwhile, the greenback remained mildly supported after Federal Reserve Chair Janet Yellen told the U.S. Senate Banking Committee on Tuesday that the central bank will likely need to raise interest rates at one of its upcoming meetings.

Ms. Yellen said that waiting too long to raise interest rates would be "unwise," given the rise in inflation and economic growth.

The greenback was also underpinned by Thursday's upbeat U.S. jobless claims and building permits data.

Sterling was also lower against the euro, with EUR/GBP gaining 0.34% to 0.8574.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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