Sterling fails to capitalize on June’s 1% retail sales rise as risk aversion and fiscal worries weigh on sentiment.
The British Pound (GBP) traded near 1.3300 against the US Dollar (USD) on Friday, extending a 1% weekly decline despite stronger-than-expected UK Retail Sales data. June retail sales rose 1% month-over-month, defying forecasts of a 0.3% drop, while annual growth hit 4.2%, nearly double expectations.
The upbeat figures failed to offset broader market concerns, including geopolitical tensions in the Red Sea and new US tariffs announced by the Trump administration. Rising US Treasury yields and Brent crude near $100 have bolstered the USD, while UK fiscal stability doubts under Prime Minister Andrew Burnham’s spending plans further pressured Sterling.
Analysts suggest the Pound’s recent strength lacks durability, with risk sentiment and policy uncertainty likely to cap gains.