GBPUSD to Search for Higher Low If U.K. Retail Sales Disappoint
Posted in the Financial Markets Forum
#1 Feb 21, 2014
The British Pound may face a larger correction over the remainder of the week as U.K. Retail Sales are expected to contract 1.2% in January.
Time of release: 02/21/2014 9:30 GMT, 4:30 EST
Primary Pair Impact: GBPUSD
DailyFX Forecast:-1.0% to 1.0%
Why Is This Event Important:
A slowdown in household spending may drag on the British Pound as it dampens the prospects of seeing a Bank of England (BoE) rate hike later this year or even in early 2015, but the data print may pave the way for fresh highs in the GBPUSD should it highlight an improved outlook for growth and inflation.
The uptick in wage growth along with the ongoing improvement in the labor market may spur a better-than-expected sales report, and a positive development should spark a bullish reaction in the British Pound as it raises the BoEs scope to normalize monetary policy sooner rather than later.
Nevertheless, the slowdown in private sector credit paired with the persistent slack in the real economy may ultimately drag on consumption, and a dismal development may spur a more meaningful correction in the GBPUSD as market participants scale back bets of seeing higher borrowing costs in the U.K.
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