GBP Slips, USD Higher on Retail Sales
The greenback is firm against major currencies, rallying specifically against the GBP and NZD. It comes as a reprieve for USD traders who had to endure torrid price action last week when the currency was being swapped in rotational plays versus major currencies. Even though the greenback's strengthening is more like correctional than structural, it is still a shot in the arm for confident bulls. Earlier, most were in a state of indecision from a torrent of conflicting news and weak labor reports.
The expansion of the greenback as retail sales exceeded expectations, and the subsequent correction, thrusting the USDX back to the squeeze of mid-January. However, it looks likely to break above 91 as buyers gallop head in a possible wave that may extend gains in the immediate term. The Euro and GBP moved in tandem with commodity-focusing NZD and AUD, both slumping on bearish forecasts. Notably, the RBA expects inflation to remain suppressed while coronavirus cases in Auckland negatively affect the kiwi. Meanwhile, inflation in the U.K. is rising but not enough to tame resurgent USD bulls despite Boris Johnson's government moves to administer coronavirus vaccines.
Impact on the GBP:
Bearish. The GBP remains on slippery ground, and a correction is highly likely in a correction. Retail sales beating expectations saw the USDX bounce back from multi-month lows, fueling talks of higher inflation readings in the coming months.
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