British Pound Unmoved on Best BRC Retail Sales Data in 6 Months
- The British Pound was little changed against its major peers
- BRC retail sales gained 1.1% (YoY) in July versus -0.7% seen
- SSI shows that 66 percent of GBP/USD traders are net long
The British Pound showed a reserved response against its major counterparts after British Retail Consortium Sales crossed the wires. The data was released less than one week after a highly anticipated Bank of England rate decision. In this monetary policy announcement, the central bank appears to have downplayed the threat of a near-term recession due to their newly enacted accommodative measures.
In July, BRC sales increased 1.1 percent (YoY) versus -0.7 percent expected and -0.5 percent in June. Meanwhile, total sales improved 1.9 percent (YoY) from 0.2% in June. Both of the consumer spending measurements marked their largest gains since January 2016, a six-month high.
Perhaps the better than expected data releasing against the backdrop of a dovish central bank does not have much scope to impact policy easing bets. It could be possible to get a stronger lead from next week’s higher profile releases such as UK’s consumer price inflation report. In addition, a singular piece of economic data does not necessarily imply that a trend has reversed.
Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing a reading that roughly 66 percent of open positions in GBP/USD are long. The SSI is a contrarian indicator at extreme levels, implying furtherGBP/USDweakness ahead.