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Forex - GBP/USD hits fresh 4-1/2 month lows on U.K. retail sales

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Investing.com -

Investing.com - The pound fell to fresh four-and-a-half month lows against the U.S. dollar on Thursday, after the release of disappointing U.K. retail sales data and as the minutes of the Federal Reserve's latest policy meeting continued to support the greenback.

GBP/USD hit 1.6564 during European morning trade, the pair's lowest since April 4; the pair subsequently consolidated at 1.6578 edging down 0.10%.

Cable was likely to find support at 1.6556, the low of April 4 and resistance at 1.6679, Wednesday\'s high.

Official data showed that U.K. retail sales rose 0.1% in July, disappointing expectations for an increase of 0.4%. Retail sales for June were revised to a 0.2% gain from a previously estimated 0.1% rise.

Year-on-year, U.K. retail sales rose 2.6% last month, confounding expectations for a 3.0% increase. For June, retail sales were revised to an annualized 3.4% gain from a previously estimated 3.6% advance.

Meanwhile, the dollar remained broadly supported after Wednesday's minutes of the Fed's July meeting showed that some officials believe the strengthening recovery and ongoing improvement in the labor market supports a move towards tightening monetary policy.

Other officials want to see further evidence of economic recovery before moving towards raising rates.

Investors were looking ahead to a speech by Fed Chair Janet Yellen in Jackson Hole on Friday for further indications on the possible future direction of monetary policy.

Sterling was lower against the euro, with EUR/GBP edging up 0.17% to 0.8003.

Data also showed that activity in the euro zone's manufacturing sector slowed to a 13 month low in August, with the euro zone manufacturing purchasing managers' index down to 50.8 from 51.8 in July. Economists had forecast a decline to 51.3.

The region's services PMI slid to 53.5 from 54.2 in July, in line with forecasts.

Activity in Germany's factor sector slowed but remained solid, with the German manufacturing PMI down to 52.0 from 52.4 in July. The country's services PMI ticked down to 56.4 from 56.7 last month.

Manufacturing activity in France contracted for a sixth successive month, with the French manufacturing PMI falling to a 15-month low of 46.5, but the country's services PMI improved to 51.1.

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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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