Forex Pros — The pound extended losses against the U.S. dollar on Thursday, following official data showing that retail sales in the U.K. fell more than twice as fast as expected in May, more than reversing the previous month’s gains.
GBP/USD hit 1.6099 during European afternoon trade, the pair’s lowest since May 24; the pair subsequently consolidated at 1.6109, shedding 0.50%.
Cable was likely to find short-term support at 1.6056, the low of May 24 and a seven-week low and resistance at 1.6382, Wednesday’s high.
The Office for National Statistics said retail sales volumes, including automotive fuel, fell 1.4% last month, more than reversing April’s 1.1% gain and well below forecasts for a fall of 0.5%. It was the biggest fall since January 2010.
Year-on-year, retail sales rose at an annualized rate of 0.2% in May after increasing by 2.4% in April. Analysts had expected year-on-year retail sales to rise at an annualized rate of 1.7% last month.
The statistics office said the fall in retail sales was mainly attributable to the largest monthly decline in food store sales since June 2008.
Meanwhile, the pound was almost unchanged against the euro, with EUR/GBP dipping 0.01% to hit 0.8752.
Later in the day, the U.S. was to publish a weekly report on initial jobless claims, as well as data on building permits, housing starts and manufacturing activity.
ForexPros.com
