GBP/USD edges lower on Friday morning following the previous session’s downside momentum. The pair tried to move above 1.3850 in the American session but slide below 1.3750 after higher-than-expected US Retail sales data released on Thursday.
As of writing, GBP/USD is trading at 1.3784, down 0.03% for the day.
The movement in GBP/USD is primarily driven by the overnight gains in the greenback. Buoyed by the better-than-expected economic data and the concerns about the rapid increase of the Delta variant of coronavirus cases globally kept USD in demand owing to its safe-haven appeal.
Furthermore, the growing expectations that Fed should begin tapering in November also add to the attractiveness of the greenback.
As per the latest Reuters opinion poll, nearly three-quarters of the economists looking at the possibility of the start of the tapering as soon as November.
The US retail sales jumped 0.7% in August following an upward revised 1.8% fall in July and against the market expectations of a 0.8% drop.
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The pound remained weak on reduced investor’s risk appetite amid growing concerns about the pace of global economic recovery.
It is worth noting that, S&P 500 Futures is trading at 4,473.75, down 0.16% for the day.
Meanwhile, Brexit Minister David Frost said on Thursday that the special status accorded per the initial Brexit deal retained the EU law which would be abolished. The move is expected to worsen the ongoing cold war between the UK and EU, another weighing factor for the sterling.
As for now, investors turn their attention to the UK retail sales data to gauge market sentiment. Source.