GBP/USD sticks to modest gains below mid-1.1800s, moves little post-US Retail Sales
- GBP/USD gained some positive traction on Friday amid subdued USD price action.
- The USD bulls seemed rather unimpressed by stronger monthly US Retail Sales data.
- Weaker US bond yields, a positive risk tone undermined the safe-haven greenback.
The GBP/USD pair held on to its modest intraday gains, below the 1.1850 region, through the early North American session and moved little in reaction to upbeat US macro data.
The US Census Bureau reported this Friday that Retail Sales rose 1% in June, better than estimates for a 0.8% increase. Adding to this, the previous month's reading was also revised higher to show a 0.1% decline as against the 0.3% fall reported earlier. Furthermore, excluding autos, core retail sales also surpassed expectations and climbed 1% in June, up from the 0.5% increase in the previous month.
Fed Governor Christopher Waller said on Thursday that his decision to back the case for an aggressive rate hike at the upcoming meeting depends on incoming data. Waller specifically cited retail sales and housing as two key metrics. Hence, the stronger data might have lifted bets for a 100 bps rate hike move on July 27, though failed to impress the US dollar bulls and provide any impetus to the GBP/USD pair.
A rather muted reaction in the money markets turned out to be a key factor that held back the US D bulls on the defensive. Apart from this, a goodish recovery in the global risk sentiment, as depicted by a generally positive tone around the equity markets, continued denting the greenback's safe-haven status. This, in turn, offered some support to the GBP/USD pair and remained supportive of the modest intraday gains.
Technical levels to watch