Pound to Dollar End-of-Week Forecast: GBP/USD Flat following US Retail Data

October 18, 2024 - Written by John Cameron

STORY LINK Pound to Dollar End-of-Week Forecast: GBP/USD Flat following US Retail Data

The Pound US Dollar exchange rate traded largely sideways on Thursday following the publication of the US’s retail sales data for September.

At the time of writing, GBP/USD was trading at approximately $1.3005, virtually unchanged from the start of Thursday’s session.

The US Dollar (USD) treaded water against most of its counterparts on Thursday following the release of the latest US retail sales figures.

Thursday afternoon saw September's retail sales index outpace market expectations, climbing to 0.4% from a previously reported 0.1% while surpassing the predicted 0.3% reading.

Despite this upbeat data, the 'Greenback' failed to gain traction as it was marginally held back by an unclear market mood.

The Pound (GBP) struggled to draw investors on Thursday as a dearth of UK data releases left it susceptible to the fallout from Wednesday's underwhelming inflation report.

In the previous month, the UK's consumer price index (CPI) failed to meet expectations, with the Office for National Statistics (ONS) revealing that headline inflation slipped below the Bank of England's (BoE) 2% target for the first time in a three year period.

This sparked bets on back-to-back BoE rate cuts in November and December, diminishing the Pound's allure in the aftermath of the release.

Although the Pound did manage to recoup most of its losses from Wednesday's downturn, it continued to encounter resistance on Thursday, hampered by the lack of other economic drivers.

Looking forward, the key driver of the Pound US Dollar exchange rate on Friday is expected to be the release of the UK’s retail sales data.

The forthcoming retail sales index is expected to indicate a decrease in consumer spending in September, with the figure projected to retreat from a 1% in August to a -0.3% in September.

If the data meets these expectations and verifies a decline in last month's retail sales, the Pound may encounter headwinds at the end of this week.

Shifting focus to the US dollar, Friday’s data calendar is devoid of domestic releases, potentially leaving USD exchange rates susceptible to shifts in market risk sentiment.

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TAGS: Pound Dollar Forecasts