Market Overview

GBPUSD storming 1.4000 despite a huge drop in retail sales

A dip in UK retail sales of 8.2% in January does not seem to have succeeded in dampening buyer interest in the British pound. The drop in sales is linked to a strict lockdown last month, but progress in vaccination allows markets to be optimistic about the future, benefiting the pound.

GBPUSD is approaching 1.4000, a psychologically crucial round level. Sterling has been showing a steady upward trend since last September and has accelerated its growth this month.

The currency market seems to be positively surprised by the progress in vaccination in the UK, in addition to reassurances from Bank of England officials that negative rates are not on the agenda.

Recent inflation data put to rest fears of a prolonged recovery, as seen in the wake of the global financial crisis. This time the economy is experiencing a sharp dip but is quickly returning to form.

The FxPro Analyst Team

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