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Forex - GBP/USD extends losses after retail sales disappoint

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Forexpros - The pound extended losses against the U.S. dollar on Thursday, falling to a fresh daily low after a report showing U.K. retail sales rose less-than-expected in July added to concerns over the U.K. economic outlook.

GBP/USD hit 1.6480 during European afternoon trade, the daily low; the pair subsequently consolidated at 1.6492, declining 0.32%.

Cable was likely to find support at 1.6322, the low of August 16 and resistance at 1.6591, Wednesday's high and a three-month high.

The U.K. Office for National Statistics said earlier that retail sales rose by 0.2% in July, below expectations for a 0.3% gain, as demand at clothes and household-goods stores declined.

The previous month's figure was revised up to a gain of 0.8% from a previously reported 0.7% increase.

The downbeat retail sales data underscored concerns over the U.K. economic recovery, following Wednesday's dismal employment report, and boosted speculation the Bank of England will introduce further easing measures to prop up the faltering economy.

Minutes from the BOE's August policy-setting meeting published Wednesday proved to be more dovish than expected, showing that policy makers voted 9-0 to keep interest rates at a record low of 0.5%.

The decision was the first since May 2010 without a vote for a rate increase. Policy makers voted 7-2 to keep interest rates on hold in July.

The MPC also voted 8-1 to maintain the central bank's asset-purchase program at GBP200 billion.

Some policy maker "considered whether there was a case for increasing" asset purchases, but they concluded the case "was not yet strong enough," the minutes showed.

Elsewhere, the pound was fractionally higher against the euro, with EUR/GBP easing down 0.04% to hit 0.8716.

Later in the day, the U.S. was to publish a flurry of economic data, which will help traders gauge the strength of the U.S. economic recovery.

The country was to produce government reports on initial jobless claims, consumer price inflation, existing home sales, manufacturing activity in Philadelphia as well as a report on natural gas stockpiles.

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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.


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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