British Pound Hits Fresh High as Forex Traders Dump Dollar
British pound hit fresh high in the forex market this week amidst growth optimism following retail sales data. Data from the forex market showed that GBPUSD cleared at 1.3538 on Friday as sterling has gained 1.93% against the greenback.
Investors dumped dollar as the US administration re-ignite trade war tantrum with threat to slam the European Union – a move that again strengthened EURUSD.
The market had seen the GBPUSD pair advanced to a fresh three-year high of $1.3480 after a much brighter-than-expected retail sales report got traders excited about the UK economy and the sterling.
U.K. retail sales jumped higher than expected last month, a result of warmer weather that helped food stores bounce back. Retail sales volumes climbed 1.2% on month in April after a 0.1% rise in March, the Office for National Statistics said Friday.
Economists polled by The Wall Street Journal had expected a 0.3% increase.
It was a fourth-straight monthly increase, the first time that has happened since mid-2020 after businesses reopened following the first Covid-19 pandemic lockdowns. Volumes rose by 1.8% in the three months to April, when compared with the three months to January, the largest in nearly four years, the ONS said.
“Sunny skies and warm temperatures helped boost retail sales in April with strong trading across most sectors,” ONS senior statistician Hannah Finselbach said.
Food stores sales rose by 3.9%, mostly recovering from falls in February and March, though clothing sales fell in April despite growth in department stores and household-goods shops.
Consumer confidence edged up from lows this month, likely a result of the U.S. agreeing to roll back some import tariffs on British goods and the Bank of England cutting its key interest rate, according to separate data released Friday.
The U.S. dollar dropped across the board on Friday, as investors dumped the currency after U.S. President Donald Trump once again reactivated his trade war, recommending that the European Union be hit with 50% tariffs beginning June 1. IMF Cuts Global Economic Growth Forecast to 2.8%
