Pound Sterling rose sharply this week, supported by better-than-expected UK Retail Sales and January PMI data. The British currency strengthened to near 1.3536 against the US Dollar (USD), reflecting renewed investor confidence.
Retail Sales Boost Pound Sterling
December Retail Sales rose 0.4% month-on-month, surprising analysts who had expected a slight decline. On an annual basis, sales increased 2.5%, signaling strong consumer spending. This rebound follows two months of contraction, providing short-term support to the Pound Sterling and reducing expectations of immediate Bank of England rate cuts.
PMI Data Strengthens Confidence
The flash S&P Global Composite PMI jumped to 53.9 in January, surpassing forecasts. Services PMI hit 54.3, while Manufacturing PMI climbed to 51.6, showing broad-based growth across sectors. These figures underpin the resilience of the UK economy and the strength of the Pound Sterling.
USD Pressure and Technical Outlook
The US Dollar remains subdued amid geopolitical uncertainties and trade concerns, pushing GBP/USD higher. Technically, the pair stays above its 20-day EMA at 1.3444. Support is seen at the 61.8% Fibonacci level of 1.3494, while a move toward 1.3625 is possible if momentum continues. The Pound Sterling maintains an upward bias.
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