- GBP/USD gained some positive traction on Friday amid muted USD price action.
- Dollar bulls were unimpressed by the monthly US retail sales data.
- Weakening US bond yields and a positive risk tone undermined the dollar as a safe haven.
The pair GBP/USD it maintained its modest intraday gains below the 1.1850 area during the early American session and was little moved in reaction to US macro data.
The US Census Bureau reported Friday that retail sales rose 1% in June, beating estimates for a 0.8% increase. In addition, the previous month’s reading was also revised higher to show a 0.1% decline from the 0.3% decline previously reported. Also, excluding autos, core retail sales also beat expectations and rose 1% in June, compared to a 0.5% rise in the previous month.
Federal Reserve Governor Christopher Waller said Thursday that his decision to back the case for an aggressive rate hike at the next meeting depends on what data comes out. Waller specifically cited retail sales and housing as two key indicators. Therefore, the stronger data might have raised the stakes for a 100 basis point rate hike on July 27, although it failed to impress US dollar bulls or provide any boost to the GBP/USD pair.
A rather subdued reaction in the money markets turned out to be a key factor holding the US D bulls back on the defensive. Apart from this, a nice recovery in global risk sentiment, as evidenced by a generally positive tone around equity markets, continued to dent the dollar’s safe haven status. This, in turn, offered some support to the GBP/USD pair and continued to support modest intraday gains.
Technical levels
Source: Fx Street
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